The US Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said on Wednesday they would lower the cost of existing dollar swap lines by 50 basis points from Dec. 5, and arrange bilateral swaps to provide liquidity for other currencies. A move by China on Wednesday to cut the percentage of cash banks must keep as reserves also boosted sentiment. "Investors are relieved by the central banks' clear stance on keeping their rates lower. Not only major central banks but those of emerging economies such as Brazil are easing," said a trader at a Japanese bank. "Ample cash will likely keep supporting financial markets." Lead JGB futures were up 0.11 point at 141.88, rebounding from a four-month low hit earlier on Thursday, after players initially reacted to a rise in stock prices. A warning from Japanese ratings firm R&I on Japan's sovereign debt rating was offset by the central banks' liquidity moves, market players said. Analysts at R&I told Reuters that it will likely cut its AAA rating on Japan's sovereign debt by one notch by year-end, saying it looks almost impossible to achieve the government's target to have a primary budget balance by 2020/21. In cash bonds, 10-year paper outperformed as the No.318 10-year JGB yield declined 1 basis points to 1.060 percent after marking a four-month high of 1.090 percent on Thursday morning. GOOD DIGESTION A 2.2 trillion yen ($28.34 billion) auction of 10-year JGBs on Thursday drew tepid demand in the primary market, but was digested well in the secondary market, traders and fund managers said. "The 10-year auction provided a good opportunity to confirm demand and show that Japan is not Italy. With recent sell-offs and with the central banks' liquidity move, JGBs with medium maturities should keep drawing decent demand," said a fund manager at a Japanese asset management firm. Meanwhile, gains in superlongs such as 20- and 30-year JGBs were limited as auctions for the maturity are scheduled for the following weeks, the fund manager said. The 20-year yield was unchanged at 1.820 percent and the 30-year yield climbed 1 basis point to 1.990 percent. Despite a surge in stock markets, players remained cautious about prospects for a resolution to the euro zone debt crisis. "The move (by central banks) has bought policymakers some time, but it remains to be seen whether euro zone members can reconstruct their finances or make progress on fiscal reform in the euro area," said Katsutoshi Inadome, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities. The Nikkei share average advanced nearly 2 percent to a two-week high on Thursday.