Buy foreign currency at low yen rates: Top 5 expert exchange tips

Text by MOOK Scenic Spots Editorial Department, compiled and reported

Before traveling abroad, exchanging currency becomes an important part of pre-trip preparation, especially for independent travelers. Exchanging at the right time can save you a lot of money. When converting other countries' currencies, there are many things to pay attention to and skills that travelers might want to keep in mind to make pre-trip preparations easier.

1. Understand the exchange rate table
Before buying foreign currency, you must first understand how to read the exchange rate table. For example, the cash exchange rate is the price for directly purchasing foreign currency banknotes; the spot exchange rate requires you to have a foreign currency account in advance, and the purchased foreign currency is deposited directly into the account rather than given as cash. In addition, checking historical exchange rates can also help you better understand whether the current price is relatively low or high.
 
2. Take advantage of bank wealth management account offers
Most domestic banks offer wealth management accounts where you can buy foreign currency at the spot exchange rate. When traveling abroad, you can directly withdraw it over the counter without having to make up the difference between the cash and spot rates. Travelers might want to consider using such services.
 
3. Apply for a foreign currency account
Frequent travelers to Japan might consider applying for a foreign currency account. This not only allows you to monitor fluctuations in the yen’s value and buy when the rate is low, but also lets you enjoy higher interest rates and avoid handling fees. At the same time, you can also make good use of various foreign currencies you hold, and through currency swaps, you may even get a favorable exchange rate.

4. Avoid unofficial currency exchanges
Many travelers may need to exchange currency on days when banks are closed. In such cases, they might turn to hotels, shops, or small vendors to exchange foreign currency. Since these merchants cannot confirm exchange rate conditions — including not knowing Monday’s rates over the weekend or facing less favorable rates when exchanging in the afternoon compared to the morning — there are certain risks involved, so it’s best to avoid them.
 
5. Exchange in installments to hedge risk
Similar to the concept of regular investing in financial management, exchanging currency in installments can help spread out risk and avoid being affected by fluctuating prices.