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Debt limit compromise: Global markets cheer, but...

Debt limit deal causes jump for stocks in Asia and stock futures in US. But big cuts from second step of debt limit plan would be needed for a durable rally.

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The dollar shot up against the yen, hitting 78.00 yen before easing back to 77.63 yen, up 0.3 percent on the day . Traders in Asia had been keeping a close eye on the yen, since the dollar dropped below 77 yen to a four-month low of 76.70 yen on Friday, raising fears of yen-selling intervention by Japanese authorities.

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U.S. Treasury debt futures fell in electronic trading. The 10-year Treasury futures were down 6/32 to 125 16/32, and in the cash market, the benchmark 10-year yield rose four basis points from late Friday inNew York to 2.83 percent .

Oil futures also rose with risky assets. U.S. crude futures for September were up $1.19 at $96.89 a barrel, while Brent crude gained $1.17 cents to $118.11.

Gold prices tumbled 0.9 percent to $1,611.89 an ounce, down from a record high of $1,632.30 reached on Friday.

Many investors believe the market focus will shift to the likelihood of a rating downgrade as well as to the structural debt problems afflicting the euro zone.

Throughout last week's increasingly intense showdown in Washington over the U.S. debt ceiling, the spreads of Italian and Spanish bond yields over Germany have been widening sharply, signifying persistent unease that Greece's problem may spread to other European countries.

"Don't forget there's Europe in the background with problems in Italy and Spain," said Natalie Robertson, a commodities analyst at ANZ. "There is still heightened risk aversion in the market and gold will probably be volatile in the next few days."