The dollar rose above 123 yen for the first time since December 2002 following strong US PPI figures and as popularity for the carry trade rebounded. US inflation at the wholesale level rose almost twice as fast as expected in May, posting a 0.9 pct rise while core inflation rose 0.2 pct after remaining unchanged in the prior two months. "The higher than expected rise in US May PPI stokes up fears that US inflation has not moderated, thereby fuelling fresh a retreat in US equities and currencies against the US dollar," said Ashraf Laidi at CMC Markets. Meanwhile investors' appetite for the carry trade - where investors borrow in low yielding currencies such as the yen to invest in high yielding ones elsewhere - has rebounded following a rise in Japanese and US stocks overnight. "The funding currencies appear to be under renewed pressure as a result of some stabilisation and consolidation in asset markets following the sharp declines seen in recent days, providing the carry trade with renewed breathing space," said analysts at BNP Paribas.