* Pension fund investment strategy also lifts sentiment – analysts * SoftBank, Fast Retailing contribute half Nikkei gains By Ayai Tomisawa TOKYO, Feb 26 (Reuters) – Japan’s Nikkei share average rose to a fresh 15-year high on Thursday morning after hedge funds were seen buying futures, while index-heavyweight stocks rose as investors’ risk appetite improved on benign comments by Fed Chair Janet Yellen.

The Nikkei rose 0.4 percent to 18,662.66 in mid-morning trade after rising as high as 18,694.74 earlier, the highest since April 2000.

Analysts say that investors have become more risk-taking since Yellen’s congressional testimony on Tuesday and Wednesday hinted the Fed is in no rush to raise rates.

“It’s mainly derivatives… hedge funds are seen covering their short positions from their selling in early January and even started piling up new long positions,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Market watchers said sentiment was also lifted by news that the Federation of National Public Service Personnel Mutual Aid Associations, the body managing Japan’s national civil service pensions, will raise its target allocation for domestic stocks to 25 percent from 8 percent.

Also known by the acronym KKR, the pension fund will slash the weighting of Japanese bonds in its portfolio to 35 percent from 74 percent.

“This officially-announced drastic investment strategy is giving renewed excitement to the market,” said Shigemitsu Tsuruta, senior strategist at SMBC Friend Securities.

Index-heavyweight stocks outperformed, with SoftBank Corp rising 1.8 percent and Fast Retailing Co advancing 1.3 percent. The two companies together drove up the Nikkei 37 points, nearly half the index’s point gains.

Exporters were mixed, with Toyota Motor Corp falling 0.2 percent and Honda Motor Co rising 0.8 percent.

Bucking the strength, Renesas Easton Co dropped 4.0 percent to a three-week low after the semiconductor trader said it will issue 1.98 million of shares through a public offering.

The broader Topix gained 0.2 percent to 1,510.87 and the JPX-Nikkei Index 400 added 0.2 percent to 13,693.33.