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FOREX-Yen takes lead as investors dodge risk; Aussie under pressure

* Yen broadly firmer in otherwise lacklustre session

* Risk appetite curbed by worries over China, Ukraine

* Aussie underperforms among major currencies

By Ian Chua

SYDNEY/TOKYO, March 12 (Reuters) - The yen held firm on Wednesday while investors kept their distance from riskier currencies such as the Australian dollar amid worries about China's economic health and tensions over Russia's seizure of the Crimea region of Ukraine.

Falls in regional shares as well as copper added to the caution mood on the state of the global economy, though the reaction in the currency market has been relatively mild.

"China seems to be slowing down and the Russian economy seems to be facing pressure as stock prices there have fallen sharply. That could slow emerging economies further," said Takako Masai, manager of forex at Shinsei Bank in Tokyo.

"There is real concern about the global economy at the moment, even if some short-term players may be thinking that the impact of the Ukraine crisis will gradually subside," she added.

The yen stood at 103.01 yen to the dollar, off a six-week low of 103.77 yen hit after strong U.S. job data last Friday.

The yen tends to outperform the other major currencies in times of heightened market stress, particularly against commodity currencies such as the Australian dollar.

The standoff in Ukraine showed little apparent sign of easing as Ukraine's acting president announced the formation of a volunteer national guard, while ousted leader Viktor Yanukovich insisted he remained the legitimate leader.

Further working against the Aussie were concerns about a slowdown in Chinese economic growth and a recent slide in the price of iron ore, Australia's biggest export earner.

The price of copper, another major export product of Australia, tumbled sharply as Shanghai futures fell 5 percent to their lowest since 2009 on concerns about the potential unravelling of loan deals where the industrial metal has been used as collateral.

The confluence of negative factors saw the Aussie slide to 92.30 yen from a 3-1/2-month high of 94.45 yen hit on Friday. Against the greenback, the Aussie was once again below 90 U.S. cents.

"There are a lot of questions around China's situation right now: is industrial and consumer demand fading, are we about to see further defaults across the financial spectrum, is the credit crunch about to resurface," said Evan Lucas, strategist at IG in Melbourne.

"All of these macro issues are feeding into China hysteria. What is compounding the situation is the emergence of how much copper and ore is being used as collateral."

The euro was also briefly unsettled after a European Central Bank official warned the bank could still ease if needed.

ECB Vice President Vitor Constancio was also reported as saying markets had not fully taken in the point the ECB made last week when it emphasized on the slack in the euro zone economy.

His comments saw the euro cede ground against the U.S. dollar and yen. It last traded at $1.3855 nursing losses of up to 0.4 percent from its high on Friday.

The New Zealand dollar held steady at $0.8472, with investors reluctant to sell the kiwi given the Reserve Bank of New Zealand (RBNZ) is widely expected to hike interest rates on Thursday.

A Reuters poll this week showed the RBNZ is set to raise rates by 25 basis points and lay out a path for a series of further increases, taking the lead among developed economies in tightening policy.

The Bank of Thailand, on the other hand, is likely to cut interest rates later in the day to help Southeast Asia's second-largest economy cope with prolonged political unrest in Bangkok.