(Recasts, adds fresh sources)
By Takashi Umekawa and Takaya Yamaguchi
TOKYO, March 24 (Reuters) - Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, will raise its foreign bond allocation target to 25% from 15%, two sources familiar with the matter said on Tuesday.
The move, which was first reported by the Nikkei newspaper, comes as the fund, which managed 169 trillion yen ($1.5 trillion) as of end-December, has retreated from unprofitable domestic bonds and pushed into foreign assets.
A GPIF spokeswoman declined to comment.
The mammoth fund is due to announce a change in its asset allocation after a review by a government panel on March 30, said the sources, who declined to be identified because they are not authorised to speak to media.
The GPIF will also cut its domestic bond allocation target to 25% from 35%, the Nikkei said.
The changes will mean that the portfolio target will be evenly split at 25% across domestic and foreign stocks and domestic and foreign bonds.
In its current portfolio, the allocation targets are 25% each for domestic and foreign stocks, 35% for domestic bonds, and 15% for foreign bonds, the Nikkei said.
The fund made a historic shift in 2014 by cutting its reliance on domestic bonds and increasing weightings of riskier assets in response to Prime Minister Shinzo Abe’s push to promote a risk-taking investment approach.
The government named Masataka Miyazono, a former Norinchukin Bank executive, as the new GPIF head on Tuesday, a day after Reuters reported his impending appointment. ($1 = 110.3400 yen) (Reporting by Takeshi Umekawa and Takaya Yamaguchi; Writing by David Dolan; Editing by Louise Heavens & Simon Cameron-Moore)