* Both Nikkei and Topix hit fresh 2-year highs
* Kobe Steel plunges 20 pct to near 1-year low
* Food, railway stocks bought while automakers sold
By Ayai Tomisawa
TOKYO, Oct 11 (Reuters) - Japan's Nikkei share average rose on Wednesday in choppy trade, edging closer to a 21-year high supported by buying in defensive stocks, while Kobe Steel extended its losses after confirming a media report that it fabricated data in iron power products.
Kobe Steel Ltd on Wednesday confirmed a media report that there may have been data fabrication in iron powder products.
The company's shares stumbled 20 percent to near one-year low of 856 yen, after plunging 22 percent on Tuesday.
The Yomiuri newspaper reported Japan's third-biggest steelmaker may have fabricated data on iron powder products used typically in components such as automotive gears.
The company is currently investigating the issue, a spokesman said.
The Nikkei rose 0.3 percent to 20,878.07 in midmorning trade after opening a tad lower. Trading was choppy, but the index later climbed to a fresh two-year high of 20,889.05, the highest level since August 2015 and moving closer to a 21-year high.
A move above the 20,952.71 level hit in June 2015 would mark its highest level since 1996.
The broader Topix rose 0.1 percent to 1,697.13, also a fresh two-year high.
On Wednesday, defensive stocks such as food companies and railway stocks attracted buyers, while exporters such as automakers languished after a weak yen trend has paused.
"The Nikkei seems to be on track to move closer to 21,000 supported by strong corporate profit hopes," said Takuya Takahashi, a strategist at Daiwa Securities.
But he added that profit-taking in some sectors is possible, while geopolitical concerns related to North Korea worry investors.
The dollar was up 0.1 percent at 112.60 yen after slipping to as low as 111.990 overnight amid speculation that President Donald Trump's tax overhaul plan would stall.
The greenback had risen to a three-month high of 113.440 on Friday but had pulled back after a flare up in North Korea worries.
Toyota Motor Corp dropped 0.7 percent, Mitsubishi Motors Corp shed 1.7 percent and Mazda Motor Corp declined 1.9 percent.
Insurance stocks, which fell on the previous day, rebounded. MS&AD Insurance gained 1.2 percent, while Sompo Holdings advanced 1.0 percent.
Meat processing company NH Foods rose 1.9 percent, flour products maker Nisshin Seifun Group advanced 1.1 percent, East Japan Railway gained 0.8 percent and West Japan Railway added 0.4 percent. (Editing by Sam Holmes)