In that case it's a typo, and should be spelled "God Rest Þe Merry", with a latin^Wenglish capital letter thorn, rather than a Y, which was used as a substitute when using early german printing type that didn't include the thorn character.
Unless you're actively trying to write in Ye Olde Butcherede Englishe, in which case go ahead.
Unless you're actively trying to write in Ye Olde Butcherede Englishe, in which case go ahead.