* Fed raises rates as expected, "dot plots" surprise on upside
* Wall St slips, most Asia stocks follow
* Dollar hits 14-yr high on currency basket, 10-mth peak on yen
* European shares seen slightly weaker
* Oil stabilises after paring this week's gains
By Wayne Cole and Hideyuki Sano
SYDNEY/TOKYO, Dec 15 (Reuters) - Asian shares and currencies softened on Thursday after the Federal Reserve raised rates for the first time in a year and hinted at the risk of a faster pace of tightening than investors were positioned for.
Yields on short-term U.S. debt surged to the highest since 2009, sending the dollar to peaks not seen in almost 14 years, which in turn prompted China's central bank to set the yuan at its weakest level against the greenback since 2008.
The Fed's anticipated policy path, and expectations U.S. President-elect Donald Trump will set growth on a higher gear, are keeping Asian policymakers on edge as capital gets sucked out from the fragile export-dependent regional economies toward dollar-based assets.
The Fed's rate rise of 25 basis points to 0.5-0.75 percent was well flagged but investors were spooked when the "dot plots" of members' projections showed a median of three hikes next year, up from two previously.
"The markets were surprised by the dot plots. Given that the 10-year U.S. bond yield has risen above the key level of 2.5 percent, the sell-off in bonds is likely to continue," said Hiroko Iwaki, senior strategist at Mizuho Securities.
The change came even as the Fed's economic projections have hardly been upgraded, suggesting the Fed could accelerate tightening even further if policymakers see firmer evidence of higher growth or inflation.
"The U.S. economy is already on a solid expansion but the new administration wants to do large-scale spending. That could surely boost inflation and U.S. bond yields," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Fed fund futures <0#FF:> slid to imply an almost 50 percent chance that the Fed will raise rates three times, with two hikes fully priced in already.