Steve Smith pulled off two stunning catches on Saturday to leave Australia with the advantage as New Zealand stumbled early in their pursuit of 369 to win the first Test.
The home side were 111-3 at stumps on day three in Wellington, with Rachin Ravindra unbeaten on an eye-catching 56 and Daryl Mitchell on 12, with the pair having put on 52 in 20.3 overs together.
Nathan Lyon took 2-27 – aided by some brilliance from Smith in the slips – to give the accomplished off-spinner six wickets for the match.
Lyon shapes as a key figure in preventing New Zealand from scoring the remaining 258 runs they need to win on a Basin Reserve pitch taking turn and bounce.
New Zealand part-time spinner Glenn Phillips earlier capitalised on the conditions, snaring career-best figures of 5-45 as Australia were bundled out for 164 in their second innings.
Lyon was introduced in the sixth over of New Zealand’s response and made an immediate impact, having Tom Latham caught behind for eight.
The 36-year-old claimed the key wicket of Kane Williamson soon afterwards for nine, when Smith pouched a sharp catch down low at leg slip.
Smith’s second catch was even better, to remove Will Young for 15 off part-time spinner Travis Head, reacting quickly to a fine edge that went low and to his left.
It was the 182nd Test catch from Smith, lifting him to sixth on the all-time list for outfielders – now 28 catches behind Indian leader Rahul Dravid.
Ravindra, who scored 240 in the first Test against South Africa last month, defied Australia late in the day with a series of aggressive strokes in his 94-ball knock.
The 24-year-old struck most of his eight fours through cuts or pulls and swatted Head over mid-wicket for six.
Mitchell was fortunate to survive an early stumping chance off Lyon, when the ball evaded the gloves of wicketkeeper Alex Carey, with the charging batsman well out of his ground.
Earlier, Australia lost their last six wickets in the space of 13 overs, with Phillips producing the best figures by any New Zealand spinner on home soil in 18 years, complementing his 71 with the bat in New Zealand’s first innings of 179.
Two wickets fell in the first session, nightwatchman Lyon departing for Australia’s top score of 41 and opener Usman Khawaja for 28 after they resumed at 13-2.
First-innings centurion Cameron Green scored 34 and Travis Head 29 but the end of their 46-run partnership for the fifth wicket sparked a collapse.
Head miscued Phillips to be caught at long-on, before the spinner removed Mitchell Marsh and Alex Carey to close catchers.
Green, who scored a career-high unbeaten 174 in the first innings, was also caught in close before Henry picked up the last two wickets to finish with 3-36.
New Zealand’s Will O’Rourke left the field after pulling up with a tight hamstring in his eighth over, putting the seamer in doubt for the second and final Test in Christchurch.
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