Japan's Government Pension Investment Fund (GPIF), the world's largest pension fund, on Friday reported a record quarterly loss of 17.71 trillion yen (164.74 billion U.S. dollars) in January-March after global stock markets plunged during the COVID-19 pandemic.

GPIF posted a negative return of 10.71 percent on its overall assets during the three months, compared with a 4.61 percent gain in the previous quarter, it said in a statement.

The mammoth-size fund, which managed 150.6 trillion yen of assets by end-March, is closely watched by global financial markets.

The quarterly loss, the biggest since GPIF started managing its assets on the market in 2001, poses a potential challenge to the new president Masataka Miyazono, who took the helm in April as market uncertainty looms.

Japan's benchmark Nikkei average fell 18 percent during the quarter, while the Dow Jones Industrial Average dropped 24 percent.

The GPIF in April raised its allocation target for foreign bonds to 25 percent from 15 percent and lowered domestic bonds allocation to 25 percent from 35 percent. Its portfolio is evenly split at 25 percent each across domestic and foreign stocks and domestic and foreign bonds.

The fund had 23.87 percent of its portfolio in Japanese bonds as of end-March, compared with 36.15 percent in September 2016 when the Bank of Japan launched its policy of pinning 10-year government bond yields around 0 percent. Its foreign bond holdings accounted for 23.42 percent of its portfolio.

The fund allocated 22.87 percent to domestic stocks and 23.9 percent to foreign stocks.

(Cover: Japan's Government Pension Investment Fund (GPIF) President Masataka Miyazono sepaks to media in Tokyo, Japan July 3, 2020. /Reuters)