Taiwan dollar up on exporters; funds limit gains

* Exporter deals lift Taiwan dollar higher

* Investors cautious ahead of central bank meeting

* Trade thin as several Asian markets shut (Updates to close)

TAIPEI, Sept 21 - The Taiwan dollar <TWD=TP> strengthened on Monday as exporters sold U.S. dollars, but gains were limited as some investors took profit ahead of a Fed meeting, leading to some fund outflows.

"Exporters lent support to the local currency as they sold U.S. dollars at around T$32.39," said a dealer in Taipei. "But there was some profit-taking in risky assets such as Asian stocks after the recent rally, so that pressured things a little."

Asian stocks eased on Monday, pulling further away from 13-month highs hit last week, as investors worried that prices may have raced too far ahead of economic fundamentals. [ID:nSP477972]

On Monday, foreign institutions sold a net total T$2.3 billion ($71 million) worth of Taiwan stocks <.TWII>, which closed 0.32 percent lower. Foreign investors have been net buyers of Taiwan stocks over the past four sessions.

Dealers said volumes were low as some countries in the region are on holiday while others stayed on the sidelines ahead of a Fed meeting and the Taiwanese central bank's policy meeting later this week.

0800 GMT FRIDAY SESSION T$ (Taipei Forex Inc) 32.419 32.458 Volume in $ mln (Taipei Forex Inc) 700 807 T$ (Cosmos) 32.405 32.440 Six-month NDFs <PNDF> -0.540/-0.490 -0.560/-0.510

Note: Taipei Forex Inc is Taiwan's main forex exchange; Cosmos is a smaller exchange

Source: NDFs quotations from Prebon Asia

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