Japan's top government spokesman welcomed the U.S. debt ceiling agreement on Monday and said he hoped it would stabilise markets.

"We welcome the U.S. debt deal and hopefully this will stabilise markets," Chief Cabinet Secretary Yukio Edano said at a regular news conference.

President Barack Obama announced on Sunday a last-minute deal to raise the U.S. borrowing limit and avoid a default.

The dollar, which on Friday fell to a four-month low of 76.70 yen amid fears of a U.S. default, sparking market caution about currency intervention by Japanese authorities, pulled back to 77.85 yen on Monday. (Reporting by Shinichi Saoshiro; Editing by Michael Watson)

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