By Ankur Banerjee and Alun John

SINGAPORE/LONDON (Reuters) - The yen was under pressure against most other major currencies on Wednesday, even as Japanese authorities said they could intervene to prop it up, while the dollar dropped after data showed inflation eased in May.

Market expectations that the Bank of Japan (BOJ) will keep interest rates ultra-low, while other central banks tighten monetary policy to curb inflation, has been weighing on the Japanese currency, driving speculation about whether and when the central bank might step in to stem its declines.

"We are closely watching currency moves with a strong sense of urgency," Japan's top currency diplomat Masato Kanda told reporters on Wednesday.

"We will respond appropriately if it becomes excessive."

The U.S. dollar rose to 144.2 yen on Wednesday - a fresh seven-month high - while the euro climbed to a 15-year high of 157.94 yen.

The rise in the dollar against the yen is set to run further, meaning the risk that Japan's finance ministry will intervene in the foreign exchange market has increased, said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:). Japan's finance ministry instructs the BOJ.

"However, we note it is the speed of change, rather than the level, that matters most in the decision to intervene," Kong said.

Japan made forays into the currency market to prop up the yen last September and October to stem a plunge in the currency, which hit a 32-year low of 151.94 to the dollar.

Meanwhile, the Australian dollar fell to a three-week low of $0.6618 after the local consumer price inflation rate slowed to a 13-month low in May.

The Aussie was last down 0.67% at $0.6641. The fell 1.04% to $0.6098

A measure of core inflation also cooled, in a sign interest rates might not have to rise again in July.

In Europe, the euro and pound both dipped a fraction against the dollar to $1.0950 and $1.12733 respectively, and the dollar also climbed 0.16% against the Swiss franc to 0.89505.

Traders are also watching the ongoing European Central Bank's (ECB) conference on central banking for any hints from policymakers about the future rate hike path.

U.S. Federal Reserve chair Jerome Powell will participate in a panel later on Wednesday alongside Bank of England Governor Andrew Bailey, ECB President Christine Lagarde and BOJ Governor Kazuo Ueda.