TOKYO, July 28 (Reuters) - Japan's shorter-dated

government bonds rose on Monday, recovering from a sell-off last

week, as investors re-evaluated the pace of Bank of Japan's rate

hikes.

The 10-year JGB yield fell 4.5 basis points

(bps) to 1.555%, after surging to 1.605% on Friday, its highest

level since October 2008.

The five-year yield fell 4 bps to 1.11%.

Yields move inversely to bond prices.

"The yields rose last week on expectations that the BOJ

would raise interest rates by the end of this year," said Naoya

Hasegawa, chief bond strategist at Okasan Securities.

"But investors wanted to wait and see the central bank's

message about the next interest rate hike at the end of the

policy meeting this week."

The BOJ will hold its next policy meeting on July 30-31, and

the market expects the central bank to hold its policy rate

unchanged.

But a trade deal to lower the hefty tariffs U.S. President

Donald Trump threatened to impose on goods from Japan opened

scope for the BOJ to raise interest rates again this year,

sources said.

Swap rates indicated a nearly 80% chance of the BOJ raising

rates by 25 basis points to 0.75% at its policy meeting in

December.

"The market wanted to know if there is a higher chance of

the BOJ raising rates earlier than December," Haseagawa said.

The 10-year JGB futures rose 0.48 yen to 137.91.

The two-year JGB yield fell 1 bp to 0.845%.

Yields on super-long dated bonds rose, with the 30-year JGB

yield rising 1.5 bps to 3.075%.

The 40-year JGB yield rose 1.5 bps to 3.365%.

The 20-year JGBs have not been priced yet, as of 0540 GMT.