Australia & NZ dollars firm, RBA rates happily on hold

* RBA minutes reiterate steady rate outlook

* Aussie up 1-1/2 yen in one session as risk sentiment improves

* Eyes on U.S. Fed and Crimea, still

By Gyles Beckford and Cecile Lefort

SYDNEY/WELLINGTON, March 18 (Reuters) - The Australian and New Zealand dollars were firm on Tuesday as concerns over the Ukraine/Crimea crisis waned for the moment, while Australia's central bank reiterated that rates were likely to be kept on hold for some time.

The Aussie AUD=D4 edged up to $0.9077, having recovered from a low just under 90 cents on Monday. It made the biggest inroads against a broadly-weaker yen to be at 92.40 yen

AUDJPY=R . It gained more than 1 percent in one session as short positions were squeezed.

The Aussie was pulling closer to the five-month peak of 94.47 set in early March.

Risk appetite improved as the threat of immediate military conflict in Ukraine receded for now, with investors awaiting the conclusion of the U.S. Federal Reserve's two-day meeting on Wednesday.

"I see a stronger Aussie until the Fed does something," said Roger Bridges, head of fixed income at Tyndall Investment Management, seeing the U.S. central bank sticking with its current tapering programme.

He forecast the Aussie would trade between 85 cents and 90 cents in the near term with an upside risk due to a generally weaker U.S. dollar. .DXY

At home, minutes of the March policy meeting showed the Reserve Bank of Australia (RBA) strengthened its view of a stable interest rate outlook. News Search ID:nRUAHEEA4J

It also said while the fall in the local dollar to date would help the economy achieve balanced growth, the currency remained high by historical standards.

The central bank has long favoured a lower Aussie dollar to boost exports and help the economy transition from resource-led activity to other sectors.

Recent upbeat data in Australia has led markets to price out almost any chance of further easing with interbank futures

0#YIB: implying a less than one-in-10 chance of a cut from the

current record-low 2.5 percent. Swap markets give a small chance of a hike on a 12-month horizon. CSSY

Strong chart resistance for the Aussie was found between $0.9135 and $0.9150.

The New Zealand dollar NZD=D4 was firm at $0.8565 on the improvement in risk sentiment, and the outlook was for more gains following the central bank's move to start raising rates.

"Price action post last week's move suggests the market is still not yet overly long the New Zealand dollar, though there are a couple of risks to the near-term outlook which suggest some caution," Westpac senior strategist Imre Speizer wrote in a market commentary.

The particular risks were the Crimea tensions and concerns about China's economy, while potentially stronger data out of the United States reflecting improved weather might support the U.S. dollar.

The kiwi was trading a thin range, with near-term support around $0.8542. Initial resistance was at Monday's high of $0.8583 ahead of a more substantial barrier at the year-to-date high of $0.8607.

The better risk sentiment saw it notch modest gains against the safe-haven yen to 87.36 yen NZDJPY=R as it eyed the more than six-year high of 88.32 touched last week.

The currency is seen following broader market forces ahead of the Fed announcement later this week, with an eye to New Zealand's fourth quarter gross domestic product data on Thursday. A Reuters poll forecasts 0.9 percent growth compared to the previous quarter. Href="NewsSearch">NZ/POLL

New Zealand government bonds 0#NZTSY= were a touch softer, pushing yields a couple of ticks higher along the curve.

The improvement in risk sentiment sent Australian government bond futures lower with the three-year bond contract YTTc1 down 4.5 ticks at 96.990. The 10-year contract lost 5 ticks to 95.895.

(Editing by Eric Meijer)

((Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: cecile.lefort.thomsonreuters@reuters.net))

Keywords: MARKETS AUSTRALIA/FOREX