* East-West tensions over Ukraine increase
* Euro down against dollar on ECB comments
* China stimulus potential boosts emerging market currencies
(Updates prices, adds analyst comments)
NEW YORK, March 26 (Reuters) - The dollar fell against the yen on Wednesday after comments from U.S. President Barack Obama reignited geopolitical concerns surrounding Ukraine, while the potential for fresh stimulus from China boosted emerging market currencies.
Obama, in a speech in Brussels, said Russia's isolation would deepen and sanctions would expand if the country continued its current course. The comments drove demand for the safe-haven yen a day after the West's decision to hold off on more sanctions calmed fears.
"Obama's comments are a reminder that geopolitical tensions still pose a risk for the financial markets," said Kathy Lien, managing director at BK Asset Management in New York.
The worries surrounding East-West tensions sent Russia's rouble currency lower versus the dollar. Hopes for fresh stimulus in China helped boost other emerging market currencies such as the Turkish lira, Chilean peso and the South African rand.
Data this week showing weaker-than-expected manufacturing growth in China pointed to a contraction in the first three months of the year and raised expectations of government stimulus to boost the world's second-largest economy.
"Bad news is good news" with regard to China since weak economic data in the country reinforces expectations for stimulus, said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
The dollar gained against the euro, meanwhile, on a more favorable monetary policy outlook for the U.S. Federal Reserve compared to European Central Bank policymakers' comments on Tuesday.
Expectations that the Fed will reduce monetary accommodation led investors to favor the dollar against the euro, which was hit Tuesday after ECB policymakers hinted at a softening of monetary policy.
Investors had bought the dollar last week after Fed Chair Janet Yellen suggested the possibility of raising interest rates early next year.
ECB governing council member and Bundesbank chief Jens Weidmann said Tuesday that negative interest rates were an option the bank could use to counter strong gains in the single currency.
The ECB holds a policy meeting next week, but before that traders will await euro zone "flash" inflation data on Monday. Another drop in price pressures could bolster expectations that the ECB may have to act soon.
The Fed's monetary outlook boosted the dollar against the euro, although the dollar's strength versus the euro will depend on the strength of U.S. economic data, said Serebriakov of BNP Paribas.
The U.S. dollar index, which measures the dollar against six major currencies, was last up just 0.07 percent at 80.002. The dollar was down 0.22 percent against the yen to trade at 102.035. The euro was down 0.25 percent against the dollar, however, to trade at $1.3792.
The dollar was last down 1 percent versus the Chilean peso at 553.38 pesos, was off 1 percent against the Turkish lira at 2.1886 lira, and was down 0.54 percent against the South African rand at 10.675 rand.
The dollar was up 0.12 percent against the rouble, however, at 35.52 roubles.
Strong U.S. economic data earlier Wednesday helped underpin the dollar's strength versus the euro. The Commerce Department said durable goods orders rose 2.2 percent in February as demand increased almost across the board, ending two consecutive months of declines.
Financial data firm Markit, meanwhile, said its "flash" composite Purchasing Managers Index (PMI), a weighted average of its manufacturing and services indexes, hit 55.8 in March, up from 54.1 in February.
(Additional reporting by Anirban Nag in London; Editing by Peter Galloway and Diane Craft)