* Planned business spending in Australia for 2014/15 upgraded

* Aussie up a quarter of a U.S. cent

* 10-yr government bond yields at lowest in over a year

By Cecile Lefort and Naomi Tajitsu

WELLINGTON/SYDNEY, Aug 28 (Reuters) - The Australian dollar received a boost on Thursday after a better-than-expected outlook for business investment leant hope the economy could weather an ongoing pullback in the mining sector, hoisting the New Zealand dollar higher.

The Australian dollar AUD=D4 powered up to $0.9360, from $0.9336 in early trade. It climbed to a three-week peak of $0.9373, where it met heavy resistance.

"Both the Aussie and bonds reacted to the headline print, but details were mixed," said Su-Lin Ong, senior economist at RBC Capital Markets in Australia.

Planned spending for 2014/15 was upgraded to A$145.2 billion, topping analysts estimates of around A$142 billion. However, there is a risk that gross domestic product (GDP) for the second quarter, due out next week, could show a contraction, partly due to consumer caution. ID:nL3N0QU0JC ID:L3N0QX5UV

Not helping is a 0.9 percent decline in plant and equipment spending, which could also drag on economic growth.

Still, some economists are guardedly optimistic.

"The better print for the actual quarter and some signs that non-mining investments are picking up are encouraging," Ong said, keeping her GDP forecast at 0.5 percent for the second quarter. ECONAU

The Aussie had already been underpinned by demand from carry trade investors, borrowing in euro to buy higher-yielding Aussie assets. The euro slipped to A$1.4110 EURAUD=R , very near 10-month lows, with charts suggesting more downside. Initial support was found at A$1.4087.

The common currency is down 2 percent this month largely due to growing expectations of another round of policy easing by the European Central Bank.

The Aussie kept near multi-month highs versus the yen, pound Swiss franc and its kiwi neighbour.

The New Zealand dollar NZD=D4 traded around $0.8384, and up from the week's trough of $0.8311.

It was supported after dairy exporter Fonterra FSF.NZ , New Zealand's largest company, on Wednesday announced a tie-up with a Chinese firm which could boost its branded infant formula sales in the Chinese market. ID:nL3N0QX4Z6

Fonterra, the world's largest dairy exporter, also stuck to its milk price forecast for the current year. There had been concerns it would lower the payout given an ongoing slide in global prices for dairy, the country's biggest export earner.

Versus the greenback, the kiwi has shed 5.6 percent since mid-July, and has retreated from a post-float high on a trade-weighted basis =NZD .

Technical support was seen at $0.8353, the 61.8 percent retracement of the kiwi's February-July rally, and below that at $0.8311.

New Zealand government bonds 0#NZTSY= rose, pushing yields as much as 4 basis points lower across the curve.

Australian government bond futures were split, with the three-year bond contract YTTc1 down 1 tick at 97.370. The 10-year contract YTCc1 added 4 ticks to 96.720, very near a 14-month peak, with the yield curve flattening.

Cash government 10-year bond yields fell to their lowest in more than a year with Australian debt AU10YT=RR at 3.29 percent and New Zealand debt at 4.11 percent.

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

Keywords: MARKETS AUSTRALIA/FOREX