Recently, I’ve noticed many people around me discussing Japanese yen allocations, especially now that the Taiwanese dollar is under increasing depreciation pressure. Honestly, whether exchanging USD for JPY is worthwhile is a very good question, because it involves exchange rate choices, cost considerations, and even investment strategies.

To start with the conclusion: now might be a good time to exchange for JPY, but it should be done in installments rather than all at once.

Why pay attention to the yen? Many people think the yen is just pocket money for travel, but in fact, the yen has long been one of the world’s three major safe-haven currencies (along with the US dollar and Swiss franc). Especially during global market turbulence, funds tend to flow into the yen for safety. Plus, with the Bank of Japan’s recent hawkish interest rate hike expectations heating up, the yen’s attractiveness is indeed increasing. For Taiwanese investors, exchanging for yen isn’t just for international travel; more importantly, it can hedge against Taiwan stock market risks.

Regarding methods of currency exchange, I’ve summarized four common channels. The first is the most traditional: in-person cash exchange, where you go to a bank and exchange Taiwan dollars for yen. The advantage is safety and peace of mind; the downside is the exchange rate spread (about 1-2% worse than the spot rate), making it the most costly. Only use this if you’re in urgent need.

The second method is online currency exchange with in-person withdrawal. This allows you to use the spot rate (better than cash exchange rates) and operate 24/7 to buy in installments, suitable for those experienced with forex. The third is online foreign currency settlement, which doesn’t require opening a foreign currency account first; you can book pickup at the airport via the bank’s website, often with no handling fee, making it very convenient before traveling. The fourth is foreign currency ATMs, which allow anytime withdrawal with only a 5 NT dollar interbank fee, but locations are limited, cash can run out during peak times, so plan ahead.

If your budget is between 50,000 and 200k NT dollars, I especially recommend a hybrid approach of “online foreign currency settlement plus foreign currency ATM” to minimize costs. Is exchanging USD for JPY cost-effective? It depends on choosing the right method; cost differences can be as high as 1,500 to 2,000 NT dollars—enough to buy many cups of bubble tea.

Currently, the exchange rate is in a volatile zone. With the Bank of Japan’s hawkish rate hike expectations high, short-term fluctuations are likely, but in the medium to long term, the yen’s value as a safe-haven asset is rising. My advice is to buy in installments, rather than all at once, to reduce risk and average costs.

After exchanging for yen, don’t let your money sit idle without earning returns. Consider a few options: yen fixed deposits with annual interest rates around 1.5% to 1.8%, which are stable and simple; or buy yen ETFs (like 00675U), which track the yen index and are suitable for dollar-cost averaging; if you want to trade actively, you can directly trade yen currency pairs, such as USD/JPY or EUR/JPY, which are classic choices and can be traded 24/7.

Overall, the yen is no longer just pocket money for travel; it’s an asset with both hedging and investment value. By following the two main principles of buying in installments and not letting your money sit idle, you can minimize costs and maximize returns. Beginners are advised to start with the simplest method—online foreign currency settlement combined with airport pickup—and then, based on needs, move into fixed deposits or ETFs. This way, you can enjoy cost-effective travel and add an extra layer of protection during global market turbulence.