* Yen broadly firmer in otherwise lacklustre session
* Risk appetite curbed by worries over China, Ukraine
* Aussie underperforms among major currencies
LONDON, March 12 (Reuters) - The Australian dollar and other currencies closely linked to commodities markets struggled on Wednesday after a 5 percent fall in copper prices overnight on fears of fading demand from China.
Slowing growth and financial sector problems in the world's second-biggest economy has been a dominant theme so far this year, keeping currency market investors in safer plays like the Japanese yen.
The Aussie, which lost ground in the final quarter of last year but has recovered some ground since mid-January on the back of improving domestic growth, fell back around 1 percent during the U.S. trading day on Tuesday.
It was another 0.2 percent lower on the day in early trade in Europe, drawing attention in markets where the major currencies have been trading in tight ranges for the past month. The euro was broadly flat against the dollar on the day.
"The focus this morning is on currencies like the Aussie, the Chilean peso, the rand," said Daragh Maher, strategist with HSBC in London.
"If there's any dominant theme its one of 'risk-off' given the concern over the slowdown in China and its financial problems. The next break in that might not come until we see more Chinese numbers tomorrow."
Chinese industrial output, investment and retail sales figures are all due at 0530 GMT on Thursday.
In Europe, industrial production numbers are due at 1000 GMT while a raft of European Central Bank officials are due to speak at a conference in Frankfurt.
After a boost following last week's ECB meeting, the euro has struggled to make further ground, bouncing off levels around $1.3915. Maher said he did not feel it looked capable of breaking through $1.40 as flagged by some analysts this week.
"I suspect there will be a temptation to sell any rallies (in the euro) from here," he said. "But it's not where the focus is this morning."
The Chilean peso, little traded in Europe, and the South African rand were among the big fallers following the sell-off in commodities on Tuesday. Both are down more than 1 percent in the past 24 hours.
There were indications that the fall for the Aussie might also have been worse. Almost 40 percent - or around 3 billion Australian dollars - of a sale of government bonds maturing in 2026 went to foreign investors on Wednesday, meaning bond investors may have had to buy the Aussie as it fell.
The yen, steadier so far this year after losing a fifth of its value against the dollar in 2013, was holding strong in early European trading, up 0.1 percent against both the euro and the dollar.
Tensions between Ukraine and Russia are also weighing on appetite for risk globally. Russian stock indexes fell again on Wednesday, reacting to the growing chance of western sanctions over Crimea. Dealers said the rouble was propped up by central bank support.
"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 New Zealand dollar held steady at $0.8469, 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.