By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Dec 15 (Reuters) - The Australian and New Zealand dollars lost ground to their U.S. counterpart on Thursday after the Federal Reserve raised rates for the first time in a year, but climbed to multi-month peaks against the yen thanks to their yield appeal.
The Australian dollar AUD=D4 stood at $0.7420, having slipped more than 1 percent after the Fed hinted at adopting a faster pace of tightening than investors had anticipated.
The Aussie later found some support after a better-than-expected jobs report at home offset recent gloom over weak third-quarter growth. Australian employment rose a net 39,100 in November, versus forecasts of a 20,000 gain. leap in employment provides further evidence that the fall in GDP in the third quarter was a blip rather than anything more worrying," said Paul Dales, chief economist for Australia and New Zealand at Capital Economics.
The futures market 0#YIB: slightly pared back the chance of a cut in interest rates from the Reserve Bank of Australia (RBA). It implies a 10 percent probability of a move by mid-2017, from 14 percent before the jobs report.
The Antipodean currencies had a better run against most major currencies, particularly the yen.
The kiwi broke a fresh peak at 83.56 NZDJPY=R , the highest in 18 months, while its Aussie cousin finally pierced stiff resistance around 86.50 yen AUDJPY=R following four attempts.
The Aussie has gained 1.5 percent this week, bringing January's peak of 87.82 yen in sight.
The euro skidded to an 18-month trough of A$1.4138 EURAUD=R and NZ$1.4792 EURNZD=R .
The Aussie and kiwi are major beneficiaries of persistently low short-term yields in Japan and the euro zone, which entice investors to borrow euros and yen at cheap rates to invest in higher yielding currencies.
The kiwi had less luck against the U.S. dollar which climbed across the board when Fed policy makers' projections on rates suggested a risk it might hike three times next year rather than twice.
The New Zealand dollar touched a 10-day low of $0.7090 NZD=D4 , having been as high as $0.7239 on Wednesday.
The kiwi also lost ground against its Antipodean neighbour, with the Aussie AUDNZD=R rising 0.5 percent to NZ$1.0440.
New Zealand government bonds 0#NZTSY= eased, sending yields around 8 basis points higher along the curve.
Australian government bond futures fell nearer to multi-month lows, with the three-year bond contract YTTc1 off 5 ticks at 98.050. The 10-year contract YTCc1 dropped 4.5 ticks to 97.1825.
The Fed rate hike shrank the spread between 2-year Australian and U.S. government bonds to the smallest in a decade at 61 basis points. It was 79 basis points early December.