* ECB policy to be accommodative for some time - Constancio
* Emerging currencies weaken with commodities on China concerns
* Chilean peso tumbles 1 percent, close to five-year lows
* BOJ holds policy steady, downgrades view of exports
By Richard Leong
NEW YORK, March 11 (Reuters) - The euro fell against the dollar and the yen on Tuesday after European Central Bank policymakers indicated traders may have overlooked the message that the bank may still act to stimulate the euro zone economy.
Emerging market currencies declined along with a drop in commodity prices on jitters about Chinese growth. Copper prices fell to the lowest in more than three years partly on worries about Chinese selling of its inventories to finance deals. Chile, a major copper exporter, saw its currency tumble to its lowest in nearly five years against the U.S. dollar.
The euro strengthened to a 2-1/2-year peak against the greenback last week after the ECB refrained from introducing unconventional measures to avert deflation and ECB President Mario Draghi made remarks following the bank's policy meeting that were seen as hawkish.
Further ECB stimulus is seen as negative for the euro because it would inject more cash into the economy, eroding the currency's purchasing power.
"The market is really interested in whether it correctly interpreted Draghi's comments," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.
A couple of top ECB officials signalled traders might have overreacted to Draghi's remarks at last week's news conference.
Vice President Vitor Constancio told MNI news agency that the ECB had made its forward guidance more precise at its March meeting by emphasizing the slack in the euro zone economy. The ECB still has policy ammunition in the form of lower interest rates or quantitative easing if needed, he said.
His remarks came after ECB board member Sabine Lautenschlaeger, in an interview published Monday by The Wall Street Journal, said the bank has not run out of options to stimulate the economy and will act if necessary.
The euro was down 0.07 percent against the dollar at $1.3866 , retreating further from the 2-1/2-year peak of $1.3915 hit on Friday. The euro was down 0.4 percent at 142.64 yen , off a recent two-month high of 143.79 yen.
The euro's inability on Friday to close above $1.3894, which is a crucial technical level and its Dec. 27 high, indicated that its rally has faded in the short term, said Ned Rumpletin, a G10 currency strategist at Standard Chartered in London.
Still, Rumpletin upgraded his euro/dollar forecast for the first quarter and the second quarter to $1.38 and $1.35 from his earlier view of $1.32 and $1.31, respectively.
Currencies of fast-growing economies fell on worries about China where its first domestic bond default stoked fears about slowing growth of the world's No. 2 economy and its demand for copper and other raw materials.
The Chilean peso was among the day's worst-performing emerging market currencies, falling 1.1 percent to 575.13 pesos to the U.S. dollar. The Mexican peso slipped 0.4 percent, while the South African rand lost 0.9 percent.
"The slowdown in China usually gets people worried. Commodity prices have come down," said Ron Simpson, director of currency research at Action economics in Tampa, Florida.
Three-month copper on the London Metal Exchange closed down 2.6 percent at $6,475 a tonne after touching a low of $6,469.75, its weakest since July 2010.
The sell-off in emerging markets currencies sparked some safe-haven moves into the yen in afternoon U.S. trading.
The yen earlier edged up after the Bank of Japan held steady on monetary policy and its chief, Haruhiko Kuroda, said there was no need to adjust policy for now.
The BoJ maintained its stance on massive monetary stimulus, as widely expected, and stuck to its view that economic growth and consumer price increases remain on track. It downgraded its view of exports but upgraded its view of capital expenditure and industrial production.
The dollar was down 0.3 percent in late trading at 102.95 yen.
Analysts anticipate the Federal Reserve will likely further pare its bond-purchase program by $10 billion a month at its March 18-19 policy meeting.