Recently, my friends around me have been asking how to exchange Japanese yen in the most cost-effective way—especially which yen denominations are better to exchange. Honestly, many people think that exchanging yen is just a matter of going to the bank one time and that’s it. But in reality, if you simply choose the right method, the difference in exchange rates could be enough to pay for several more cups of bubble tea.

Based on my own experience exchanging Japanese yen over the past few years, it mainly depends on what you’re using it for. If you only need it urgently for a short trip abroad, you can just exchange it at a bank or at an airport counter. But if you want to plan seriously—optimizing both your choice of yen denominations and the way you exchange—you’ll find there are quite a few small tips.

Let’s start with the most traditional method. Exchanging Taiwan dollar cash directly at a bank or airport counter for Japanese yen is the simplest option, but the exchange rate is usually worse. That’s because banks use the “cash selling exchange rate,” which is typically 1 to 2 percentage points worse than the market spot exchange rate. Also, some banks charge an additional handling fee. If you exchange NT$50,000, you could end up losing around NT$1,500 to NT$2,000. The advantage of this method is that it’s safe and reliable, and the denomination options are more varied (you can get 1000, 5000, and 10000 yen), which is especially suitable for people who aren’t familiar with online transactions or who truly need it right away.

A smarter approach is to use online currency exchange. Taiwan Bank’s “Easy Purchase” or Mega International Bank both offer this service. You fill in the amount you want to exchange, the denominations, and the pickup branch on the official website, then bring your ID and the transaction notice to pick up the yen at the counter. With this method, the exchange rate is usually more favorable, and handling fees are often waived. It also lets you reserve pickup at airport branches, which is extremely convenient for people planning before their trip. I personally use this most often—especially because Taoyuan Airport has so many Ta iwan Bank locations—so I don’t really worry about not having a place to pick up.

If you exchange currencies frequently or want to enter gradually in batches, online exchange is also an option. You can use a bank app or online banking to convert Taiwan dollars into Japanese yen and hold them in a foreign currency account. The spot rate is used, which is much more favorable than the cash selling rate. If you need cash, you can withdraw at the counter or use a foreign currency ATM to take out yen. Although there will be an additional fee for the cash withdrawal, the overall cost is still lower than exchanging cash directly at a counter. This method is suitable for people with forex experience, because you can monitor exchange rate movements and buy in batches when the price is low, making your average cost more cost-effective.

I’ve also used foreign currency ATMs a few times. With a chip-enabled financial card, you can withdraw 24/7, and the cross-bank fee is only 5. It’s truly convenient. However, the downside is that there are limited locations—nationwide, there are only around 200 machines. Also, the denominations are fixed, only 1000, 5000, and 10000 yen. When there are a lot of people (such as during peak airport hours), you may still find the machine doesn’t have enough cash. Because of that, I usually don’t wait until the last minute to withdraw, so I don’t risk getting there and having nothing available.

When it comes to which yen denominations are better to exchange, my suggestion is to decide based on your use case. For short-term travel, carrying a few 10,000-yen notes is enough, because many small shops in Japan still only accept cash. If you carry denominations that are too small, it can be inconvenient instead. But if you’re doing small-scale investments or planning to hold long term, you don’t need to be too concerned about denominations. You can simply keep the yen in a foreign currency account, which also saves you the cost of handling cash.

My personal approach is a mixed method—combine online currency exchange with foreign currency ATMs. About a week before traveling, I use online exchange to reserve some yen for airport pickup. If I suddenly need more before departure, I can top up using an ATM. This way, you get the favorable rates from online exchange and also the flexibility of using an ATM.

As for whether exchanging Japanese yen right now is worth it, my view is this: it is worth it—but do it in batches. Even though the yen can still fluctuate in the short term, over the long run it’s indeed one of the three major safe-haven currencies. In an environment where the Taiwan dollar is depreciating, converting part of your funds into yen can also be a form of protection. But never convert everything at once—entering in stages is the way to go.

After you exchange yen, don’t let the money sit idle. If it’s only for travel, that’s fine. But if it’s for investment, you can consider a Japanese yen fixed deposit (with an annual interest rate of about 1.5% to 1.8%), Japanese yen ETFs, or even try a forex swing trading strategy. That way, not only can you enjoy a more cost-effective trip, you can also add an extra layer of protection when global markets are volatile.

In short, Japanese yen is no longer just pocket money for travel—it also has both hedging and investment value. As long as you follow the two principles of “exchanging in batches” and “don’t just leave it there,” and choose the right exchange method and yen denominations based on your needs, you can minimize costs and maximize returns. For beginners, I recommend starting with online exchange or foreign currency ATMs, then slowly explore other options—so you can be both safe and efficient.