Asian currencies were largely steady on Thursday against the US dollar in thin year-end trading with few investors willing to make fresh bets.
But regional currencies outperformed the yen, which lost more than half a percent against the dollar from late Asian trading on Wednesday to hit a two-week low of 117.98 a dollar after a US consumer sentiment indicator beat expectations.
That raised the prospect of further increases in the US benchmark interest rate, a factor that has helped the dollar gain more than 13 percent against the yen this year.
The Taiwan dollar edged to a 3-1/2-month high of 32.8960 per dollar on strong demand for local shares by foreign investors who have been net buyers on all but one day this month. The benchmark stock index rose 0.8 percent.
Analysts said thin year-end trading and absence of big flows or news were exaggerating moves, and causing the rest of Asia to delink from the yen.
"The yen link is becoming less relevant for Asia. The capital account dynamics are completely different," Mirza Baig, a strategist with Deutsche Bank.
Meanwhile, China's yuan hit 8.0709 per dollar, its highest level since being revalued in July, and its 0.08 percent rise in the past week sparked some speculation that the authorities were allowing greater flexibility in the currency.
"It is time to start seeing these larger-than-usual magnitudes as a sign of slightly looser hands by authorities," Baig said.
Traders in South Korea reported strong dollar sales by local exporters before the year-end that helped steady the won despite the yen's losses. South Korea's foreign exchange market closes for the year after the end of trading on Thursday.
The won rose to a two-week high of around 8.57 per yen, edging close to its seven-year high of 8.5130 hit on December 13.
Roh said many South Korean customers had borrowed and sold the yen in the foreign exchange market. Many were now locking in profits after the won's gains against the yen.
But traders are worried about intervention by the Bank of Korea (BoK) as the won climbs further against the yen. "The BoK is afraid of further appreciation of the cross rate against the yen," said Roh. "The 8.50 level is critical. I think they'll support the level."
Dealers suspected dollar-buying intervention by the Korean authorities earlier this week for the first time in months.
The Philippine peso matched a 2-1/2-year high of 53.03 per dollar hit on Wednesday on an inflow of remittances from Filipinos working abroad and on speculation that local bonds could get a boost from a credit rating upgrade in the new year.
Philippine, Indonesian and South Korean markets are closed on Friday.
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