But upside potential is seen limited because of the rebounds recently, some analysts said.

"Investors are being very cautious as the market had recovered quite a bit from the impact of the Japan disaster," said Alex Huang, an assistant vice president at Mega International Securities.

Tourism shares were among the top winnners, jumping 0.88 percent, with Formosa Regent 1.8 percent higher on the reports Taiwan will let individual visitors from Beijing and Shanghai to the island beginning in May.

The two sides have been discussing the issue for several months and an official decision is expected soon.

The main TAIEX index closed up 31.32 points at 8,576.40.

Electronics shares were 0.8 percent higher, with smartphone maker HTC up nearly 4 percent.

Fubon Financial , parent of Taiwan's No.2 life insurer, ended unchanged. Chinese regulators have given Fubon's fund unit a quota allowing it to invest in mainland shares.

The Taiwan dollar weakened by T$0.009 to T$29.594.

Foreign investors were net sellers on Wednesday, widening their total selling to T$61.6 billion this month.