The world’s largest bond fund manger has had a change of heart on Treasuries, raising allocations to government bonds, as the fund seeks to pre-empt an increase in buying from Japanese investors. 

The PIMCO Total Return Fund increased its allocation of Treasuries to 33% in March, up from 28% in February.

Gross said he has turned positive on Treasury bonds maturing in 10 years because the Bank of Japan’s aggressive monetary stimulus plans would drive investors to seek higher returns in overseas markets.