FOREX-Rallying dollar powers to 12-1/2-yr high vs yen

* Dollar touches 124.36 yen, highest level since December 2002

* Traders wary of verbal intervention from Japanese officials

* Aussie dollar falls 1 pct after weak capex data

By Jemima Kelly

LONDON, May 28 (Reuters) - The dollar powered to a 12-1/2-year high against the yen on Thursday, as investors bet that U.S. interest rates will rise later this year while monetary policy remains ultra-loose in Japan.

The biggest mover on major currency markets was the Australian dollar, which shed 1.2 percent against a rallying greenback after disappointing Australian capital expenditure data prompted speculation about another rate cut next week.

The dollar soared to 124.36 yen as a rise in Tokyo stocks also helped to boost risk appetite and hurt the safe-haven yen, which has been under pressure from the Bank of Japan's aggressive monetary stimulus since 2013.

Traders said players are now wary of potential verbal intervention by Japanese officials to steady the yen. On Wednesday, Japanese policymakers cautioned markets against pushing the yen down too rapidly.

"I think the move in the yen is not really reflecting fundamentals," said Nikolaos Sgouropoulos, a G10 currency strategist at Barclays (LSE: BARC.L - news) in London.

"We don't think Japanese authorities are going to be particularly happy with the yen weakening further, particularly given the extreme levels of undervaluation ... We still like dollar/yen lower."

The dollar is on track for its best month against the yen since November, gaining over 4 percent since the start of May.

"Macro (Shenzhen: 000533.SZ - news) funds betting on a September Fed rate hike have increased their long exposure to the dollar, which was the main driving force behind the rise this week," said Yunosuke Ikeda, head of FX strategy at Nomura Securities, which has many hedge fund clients.

Against the euro, the dollar was flat at $1.09035.

The single currency had earlier been boosted by tentative signs that Greece may be nearing a deal to secure fresh funding before an IMF loan repayment on June 5, but gave up its gains against the dollar as U.S. traders arrived at their desks.

"The market clearly doesn't think that the June 5 deadline really is a deadline, and I think we're drifting further in that direction," said Adam Cole, global head of FX strategy at RBC Capital Markets. "So that's diminishing the risk premium in the euro."

Commodity currencies came under pressure across the board, with the Aussie hitting a six-week low of $0.7633, and New (KOSDAQ: 160550.KQ - news) Zealand's dollar shedding over 1 percent to trade at $0.7168 , its weakest in over four years.

The Canadian dollar also hit a six-week low of C$1.2503 against its U.S. counterpart. (Additional reporting by Tomo Uetake in Tokyo and Ian Chua in Sydney; Editing by Catherine Evans)