Chinex Investment Radar: Leftover Yen from Japan Trip? Don’t Waste It—Invest This Way for Better Returns!

Do you still have leftover Japanese yen from your trip sitting in your bank account? Over the past few years, the yen has continuously depreciated, leading many to believe they got a bargain—only to find themselves stuck with increasingly depreciating currency. If you don’t have immediate spending plans, instead of letting your yen sit in a low-interest deposit, consider rethinking how to use this money: turn your travel reserve into investment capital for Japanese equity funds, transforming your yen into assets participating in Japan’s stock market growth.

1. Why Do So Many People Hold Excess Yen?

Historically, the yen’s exchange rate has been heavily influenced by the yield spread between U.S. and Japanese 10-year government bonds. When the spread widens, investors tend to sell yen-denominated assets and buy higher-yielding U.S. Treasuries, pushing the dollar higher against the yen. During the yen’s prolonged decline, many Taiwan residents who love visiting Japan assumed the currency had “hit bottom” and bought in—only to see it fall even further, leaving them stuck with high-cost yen holdings.

Source: Bloomberg, compiled by Chinex Fund Buying, data period: 2021/6/30–2026/6/30, data date: 2026/7/3.

However, a new trend emerged from 2025 onward: even as the U.S.-Japan long-term bond yield spread narrowed, the yen failed to rebound significantly. The reason is that markets now consider not only the direction of the yield spread but also its absolute level and entrenched capital allocation patterns. Recently, the U.S. economy has shown stronger-than-expected resilience, and the Fed has repeatedly delayed rate cuts. Meanwhile, although the Bank of Japan has exited its loose monetary policy and officially entered a rate hike cycle, Japanese interest rates remain significantly lower than those in the stronger U.S. economy. As of end-June this year, the long-term U.S.-Japan government bond yield spread stood at 1.8%, still attractive enough to support carry trades, keeping the yen weak in foreign exchange markets. Additionally, Japanese households and financial institutions continue to increase overseas asset allocations, with Japan’s total foreign assets remaining high—indicating sustained capital outflows in search of higher overseas yields, increasing demand for dollars while reducing yen demand. This explains why the dollar-yen pair continues to rise even as the yield spread declines: recent yen weakness has evolved from a simple interest rate story into a combined effect of high U.S. yields, strong U.S. economic momentum, low Japanese rates, and persistent overseas investment demand.

Source: Bloomberg, compiled by Chinex Fund Buying, data period: 2016–2026, data date: 2026/7/15.

2. How to Use Your Yen Most Effectively?

If you bought yen at relatively high exchange rates and feel it’s wasteful to leave it in a bank with minimal interest, yet hesitate to convert it back to New Taiwan Dollars (NTD) due to exchange losses, consider investing your yen in Japanese equity funds. Although Japanese stocks and the yen exchange rate tend to move inversely, currency losses do not fully offset stock market gains. More importantly, Japan has recently become a key player in the AI supply chain, benefiting from rising demand for hardware and semiconductors, which has driven corporate profits and lifted the broader stock market. Japan is thus a market worth watching under the AI theme. (For more on Japan’s stock market growth drivers and fundamentals, see: AI Wave Takes Over from Weak Yen, Driving Fundamental Rally in Japanese Equity Funds)

The yen remains in a continuous depreciation phase. Japanese equity funds priced in yen have delivered a cumulative 82% return over the past three years. Even after accounting for currency losses, the three-year cumulative return for these funds in New Taiwan Dollar terms reached 65.6%. This shows that Japanese equity funds can deliver strong performance even amid yen depreciation, making them far more valuable than leaving money in a zero-interest bank account.

Source: Lipper, compiled by Chinex Fund Buying, using Lipper Global Classification for Japanese Equity category (yen share class), calculated in both NTD and JPY. Data as of 2026/6/30. Investors entering at different times will experience different performance outcomes, and past performance does not guarantee future results.

3. Which Japanese Funds Have Delivered Strong Past Performance? How to Find the Best Funds?

The Chinex Fund Buying platform offers as many as 107 yen-denominated funds and 66 Japanese equity category funds. Investors can use the platform’s fund search function, selecting “yen-denominated” in the filters to easily find funds available for purchase with yen. The platform also allows users to view performance in either NTD or JPY and sort by performance across various timeframes, helping identify the strongest Japanese funds that best match their needs. (For yen-denominated funds beyond Japanese equities, see: Investment Radar: Don’t Know What to Do with Leftover Yen? Read This)

Chinex Investment Strategy

Instead of waiting for exchange rates to recover, invest in Japanese equity funds to create greater value!

Short-term yen depreciation pressure is unlikely to be offset by exchange rate rebounds, making “waiting for recovery” a distant prospect. Rather than letting your yen sit idle in low-interest accounts, seize the structural growth driven by AI and turn your yen into capital for investing in Japan’s stock market—the best way to grow your assets proactively instead of passively losing value to exchange rate fluctuations.

Chinex-Selected Funds

A05186 Everbright Japan Leaders Fund Subscribe

B05003 Aberdeen Sustainable Japan Equity Fund Subscribe

B14097 Fidelity Japan Value Fund Subscribe

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