* Would buy toxic assets from US firms under gov't program

* Hopes $1 bln of $5 bln-$7 bln is from Japanese investors

* Returns over 20 pct, or losses, possible--BlackRock CEO (Updates with company comment, background)

NEW YORK, April 14 (Reuters) - BlackRock Inc (BLK.N: Quote, Profile, Research) plans to raise $5 billion to $7 billion worldwide to buy toxic assets from U.S. financial institutions under a planned U.S. government program,

The fund manager hopes about $1 billion of that will come from Japanese institutional investors, BlackRock CEO Laurence Fink told the Nikkei financial daily in a report confirmed by a BlackRock spokeswoman.

The U.S. Treasury Department has given asset managers until April 24 to submit applications to participate in the Securities Public-Private Investment Funds Program, and BlackRock, one of the world's largest fixed-income managers, will apply, the company spokeswoman said.

The government will say on May 15 who the handful of managers running the program will be.

Fink also said BlackRock planned to set up a retail fund in the United States to allow individual investors to participate in the Securities Public-Private Investment Funds Program.

He said investments in the toxic assets program could deliver returns of more than 20 percent if the financial system stabilized -- but could also lead to losses if housing prices continued to fall.