TOKYO (BLOOMBERG) - The world's biggest pension fund posted the worst annual performance since the global financial crisis, with losses exacerbated by unfavorable currency moves and a foray into equity markets.

Japan's US$1.3 trillion (S$1.75 trillion) Government Pension Investment Fund lost 3.8 per cent in the year ended March 31, or 5.3 trillion yen, the retirement manager said Friday. That's the biggest drop since the fiscal year ended March 31, 2009. GPIF lost 10.8 per cent on domestic equities and 9.6 per cent on shares in other markets, while Japanese bonds handed the fund a 4.1 per cent gain.

The annual loss - GPIF's first since doubling its allocation to stocks and paring domestic bond holdings in October 2014 - came during a volatile stint for markets. Japanese shares sank 13 per cent in the year through March while the yen climbed 6.7 per cent against the dollar, reducing returns from overseas investments. The only asset class to post a profit was local debt, which jumped in value as the Bank of Japan's adoption of negative interest rates sent yields tumbling.

"The results are painful," said Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui Asset Management Co. in Tokyo. "Because it's a pension fund, they need to have a long-term outlook, so I don't think we can say yet that they took on too much risk. It was a harsh investment environment for most of us."

In a press briefing after the results were announced, GPIF President Norihiro Takahashi said he will reflect on the performance, but that the current portfolio has enough flexibility to adapt to different market conditions and he wants to run the fund steadily. Yoshihide Suga, Japan's chief government spokesman, said GPIF's management shouldn't be influenced by short-term moves and there is absolutely no issue with its financing.

The fund also disclosed individual stock holdings and the issuers of the bonds it held as of March 2015, the first time it's divulged such detail. GPIF's biggest investments in stocks were Toyota Motor Corp. and Mitsubishi UFJ Financial Group Inc. in Tokyo and Apple Inc. outside Japan.

The fund's largest debt holdings included Japanese government bonds and U.S. Treasuries. GPIF plans to announce its holdings as of March this year on Nov. 25, and is staggering the releases to avoid impacting markets, fund official Hiro Mitsuishi said on Monday.