Hong Kong (AFP) - Asian markets kicked off the week with a rally on Monday, tracking gains made by Wall Street on Friday after the US central bank chief suggested coming interest rate cuts.

Investors weighing the prospects of a September reduction had been closely eyeing the speech by Federal Reserve Chair Jerome Powell at an annual symposium in Jackson Hole, Wyoming.

“The balance of risks appears to be shifting,” Powell said, noting a slump in employment even as inflation remains above target.

He added that the “unusual” situation “may warrant adjusting our policy stance”.

Wall Street stocks surged following Powell’s speech, rebounding from a tech sell-off earlier in the week. European markets also ticked upwards after the speech.

During the first trading sessions in major Asian markets following the comments, stocks made notable gains.

Tokyo rose almost half a percent on the day, while Hong Kong finished up 1.9 percent, boosted by a surge in Chinese tech giant Alibaba.

Shanghai, Seoul and Taipei also rose. Sydney finished marginally higher.

“By hinting that the Fed could cut even without pristine inflation numbers, (Powell) transformed caution into conviction,” Stephen Innes of SPI Asset Management wrote in a note Monday.

“Expectations for a September cut now hover near certainty,” he added.

Paris and Frankfurt were slightly down during early trading in Europe, paring back Friday gains. London was closed for a public holiday.

Powell has come under intense public pressure this year from US President Donald Trump to lower rates.

But the independent central bank has kept benchmark interest rates steady at a range of between 4.25 percent and 4.50 percent since its last reduction in December.

In keeping rates unchanged, policymakers cited resilience in the labour market as they monitored the effects of Trump’s wide-ranging tariffs on the world’s biggest economy.

Reacting to Friday’s news, the dollar fell against currencies such as the euro, pound and yen, as lower returns make the greenback less appealing to foreign investors.

Oil prices crept up on Monday, adding to increases made last week as investors considered the potential for a peace deal in Ukraine more than three years after Russia’s invasion.

Traders are now eagerly awaiting a quarterly earnings report from US chip juggernaut Nvidia on Wednesday, which is expected to shed light on how its strong push into artificial intelligence is faring.

- Key figures at around 0830 GMT -

Tokyo - Nikkei 225: UP 0.4 percent at 42,807.82 (close)

Hong Kong - Hang Seng Index: UP 1.9 percent at 25,829.91 (close)

Shanghai - Composite: UP 1.5 percent at 3,883.088 (close)

Euro/dollar: DOWN at $1.1704 from $1.1722 on Friday

Pound/dollar: DOWN at $1.3506 from $1.3523

Dollar/yen: UP at 147.30 yen from 146.94 yen

Euro/pound: DOWN at 86.67 pence from 86.69 pence

West Texas Intermediate: UP 0.4 percent at $63.91 per barrel

Brent North Sea Crude: UP 0.3 percent at $67.93 per barrel

New York - Dow: UP 1.9 percent at 45,631.74 (close)

London - FTSE 100: UP 0.1 percent at 9,321.40 (Friday close)