* All of Topix's 33 subsectors in positive territory

* Long-term investors still risk averse - analysts

* Investors will continue to prefer defensive stocks - analysts

By Ayai Tomisawa

TOKYO, Aug 27 (Reuters) - Japan's Nikkei share average rose on Thursday after a strong rebound on Wall Street eased investors' fears of a prolonged global market rout.

Expectations that the U.S. Federal Reserve might not raise interest rates next month also aided sentiment.

The Nikkei rose 2.1 percent to 18,762.43 points by mid-morning, recouping some of the huge losses it suffered in the six-day losing streak through Tuesday.

During that period, the benchmark declined 13.6 percent and hit fresh six-month lows, prompting some investors to look for bargains on Wednesday and Thursday.

In a sign that the faltering Chinese economy and slumping oil prices could affect U.S. monetary policy, New York Fed President William Dudley said the prospect of a September rate hike seemed "less compelling" than it was just weeks ago.

"The market has started to price in this prospect while the current level provides a good short-term rebound opportunity," said Shigemitsu Tsuruta, senior strategist at SMBC Friend Securities.

But he said that in the long-term, there are still doubts over whether Beijing's cuts in interest rates and reserve ratios could stabilise the economy.

"Long-term investors still have a risk-averse stance and it will persist for a while," Tsuruta said, adding that defensive shares with high dividend yields may continue to be preferred.

Defensive food shares surged. Ajinomoto Co soared 5.0 percent and Kikkoman Corp jumped 5.9 percent.

Banks also were in demand, with Mitsubishi UFJ Financial Group rising 3.9 percent, Sumitomo Mitsui Financial Group soaring 3.5 percent and Mizuho Financial Group gaining 2.9 percent.

Major exporters rose, with Toyota Motor Corp rising 3.4 percent and Advantest Corp surging 3.5 percent.

The broader Topix gained 2.5 percent to 1,515.86, with all of its 33 subsectors in positive territory.

The JPX-Nikkei Index 400 rose 2.5 percent to 13,642.50.

(Editing by Kim Coghill)