Asian stock markets surged Monday on news that U.S. President Barack Obama and congressional leaders had reached a deal to avert a debt default.

Before noon Tokyo time, the Nikkei Index had gained more than 1.8 percent, snapping a three-day losing streak, while the dollar climbed nine-tenths of a percent against the yen.

Hong Kong markets opened 1.4 percent higher, while markets across Asia trended upward. U.S. stocks were expected to rise significantly Monday, after a week of losses.

Gold dropped $14.60 to $1,612.45 an ounce.

Despite the proposed deal, analysts still believe rating agencies will likely downgrade U.S. bonds because of the uncertainly of future spending cuts and the general anxiety among investors caused by the debt crisis.

The agreement still must be passed by a deeply divided Congress.