The South Korean won briefly touched a two-year intraday high, buoyed by lower oil prices and heavy dollar selling by local companies.

After returning from a three-day long weekend break, the won rose as much as 0.8% against the US dollar to 1,333.30, before paring gains to 0.6%. Most Asian currencies also advanced.

"As oil prices fell, the euro, pound and yen all gained, and the won also strengthened in line with broad US dollar weakness," said Min Gyeong-won, an economist at Woori Bank in Seoul.

The economist added that although capital flows were relatively quiet today, dollar selling by exporters — especially chipmakers — should continue to support the won.

Thin trading volumes due to a Japanese holiday also amplified exchange rate volatility.

Year to date, the won has risen 7.6%, driven by strong exports and corporate dollar selling, leaping from the worst-performing Asian currency in the first half to the best performer so far in the second half.