The Taiwan dollar ended off a near three-year high on Friday as it joined the South Korean won in tracking the losses of the Japanese yen after the kidnapping of three Japanese civilians in Iraq.
The Taiwan dollar fell to T$32.940 on the main Taipei Forex Inc exchange, from Thursday's finish of T$32.910, which was the highest close since May 14, 2001.
Turnover shrank to a moderate US $529 million from US $595 million.
The yen fell to a session low of 106.77 after it was hurt by concerns the kidnapping could damage the administration of Prime Minister Junichiro Koizumi.
The won fell to 1,143.9 from Thursday's finish of 1,140.4 on the softer yen and suspected government intervention.
Despite weaker peers, the market expects the Taiwan dollar to appreciate in long term, seeing support in the continued buying of local stocks by foreign investors, said dealers.
Foreign investors have snapped up T$22.57 billion worth of stocks in the last four days, which has bolstered the local currency, say dealers.
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