TOKYO, Oct 28 (Reuters) - Japanese government bond (JGB) prices dropped on Monday on receding expectations that the Bank of Japan will cut interest rates this week, and on rising hopes of a U.S.-China trade deal.
Benchmark 10-year JGB futures fell 0.20 point to 153.89.
The 10-year JGB yield rose 1.5 basis points to minus 0.135%, matching a 2 1/2-month high hit last week.
The two-year JGB yield rose 1.5 basis points to minus 0.225%, hitting its highest level since early August, while the five-year yield rose 2 basis points to minus 0.250%, also a level last seen in early August.
Investors are scaling back bets that the Bank of Japan will cut interest rates at the end of its two-day policy meeting starting Wednesday, amid rising global share prices and signs of progress in U.S.-China trade talks.
Japan's Nikkei share average hit one-year highs on Monday.
At the longer end of the market, the 20-year JGB yield rose 1 basis point to 0.255%, while the 30-year yield rose 1 basis point to 0.400%.
The Bank of Japan maintained the size of its bond buying on Monday as widely expected. (Reporting by Tokyo Markets Team; editing by Uttaresh.V)