The USD/JPY pair has extended its recovery after a nominal correction to 132.50 in the Asian session amid hopes of further escalation in interest rates by the Federal Reserve (Fed). The release of the rock-bottom Unemployment Rate in the United States has stemmed fears of the continuation of the rate-hiking spell by the Fed.

S&P500 futures are holding nominal gains in the Asian session despite escalating tensions between China and Taiwan. Taiwan ministry has spotted 58 Chinese aircrafts around Taiwan Island and the continuation of drilling, which could impact the positive market sentiment. The US Dollar Index (DXY) is hopeful of recovery as the solid US labor market has supported one more rate hike from the Fed for its May monetary policy meeting.

A stellar show of decent additions of fresh talent is continued as the US economy added 236K novel jobs, almost near to the expectations of 240K. And, the Unemployment Rate tightened further to 3.5% vs. 3.6% as expected. The US labor market continues to remain tight despite higher rates from the Fed and in a course, higher rates are supportive ahead. An observation of the Fedwatch tool shows chances of one more 25 basis points (bps) rate hike near 66%. Also, the absence of headlines about further banking crises is itself good news for the USD Index.