TOKYO (Reuters) – 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) in January-March after global stock markets plunged during the COVID-19 pandemic.

GPIF posted a negative return of 10.71% on its overall assets during the three months, compared with a 4.61% 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 uncertainity looms.

Japan’s benchmark Nikkei average .N225 fell 18% during the quarter, while the Dow Jones Industrial Average .DJI dropped 24%.

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

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

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

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