Tokyo shares extended last week’s rebound on Monday, with the Nikkei 225 climbing more than 500 yen at one point to regain the 43,000 threshold after Wall Street rallied on growing expectations that the U.S. Federal Reserve will lower interest rates as soon as next month. The benchmark ultimately pared gains but still finished 174.53 points, or 0.41%, higher at 42,807.82. The broader Topix added 4.62 points to 3,105.49, led by non-ferrous metals, steel and machinery makers as investors rotated into economically sensitive sectors. Buying was fuelled by a speech delivered late last week by Fed Chair Jerome Powell at the Jackson Hole symposium, where he said policy could be adjusted amid rising risks to the labour market. Interest-rate swaps now price in roughly an 85% probability of a 25-basis-point U.S. rate cut at the 17 September meeting, pushing Treasury yields lower and lifting global equities. Currency markets reflected the shift: the dollar briefly fell more than two yen after Powell’s remarks before stabilising around ¥147 in late Tokyo trade. The softer greenback also underpinned commodities, with spot gold holding near $3,370 an ounce after a 1.1% jump on Friday.