Berkshire Hathaway Expands Investments in Japanese Trading Houses

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Warren Buffett’s firm strengthens long-term commitment to Japan’s major sogo shosha / Photo by Bloomgerg


Berkshire Hathaway, led by Warren Buffett, is set to gradually increase its stakes in Japan’s five leading trading houses: Mitsubishi Corp., Mitsui & Co., Itochu Corp., Sumitomo Corp., and Marubeni Corp. These diversified conglomerates, known as "sogo shosha," operate across multiple sectors, including commodities, infrastructure, logistics, energy, and steel. Buffett’s investment strategy underscores confidence in the financial stability and growth potential of these firms, which have historically played a crucial role in Japan’s economic expansion.

Berkshire initially disclosed its investment in these companies in 2020, revealing a 5% ownership stake on Buffett’s 90th birthday. Since then, the firm has gradually increased its holdings, reaching a total investment of approximately $23.5 billion by the end of 2024. Notably, the trading houses have agreed to adjust their ownership limits, allowing Berkshire Hathaway to potentially surpass a 10% stake in each company. Buffett emphasized that this move aligns with his long-term investment philosophy, ensuring continued involvement even beyond his tenure, with his successor Greg Abel set to oversee the expansion.

Strategic Shift Amid U.S. Market Challenges

Berkshire’s growing interest in Japanese firms highlights its strategic diversification beyond the U.S. stock market. The conglomerate currently holds a record $334.2 billion in cash reserves, reflecting Buffett’s cautious stance amid high valuations and limited attractive acquisition opportunities in the American market. His concerns regarding "fiscal irresponsibility" and unreliable financial practices in the U.S. have contributed to a reduced focus on domestic investments. Despite this, the majority of Berkshire’s portfolio remains concentrated in American equities. However, Japan’s trading houses offer compelling value, with strong fundamentals, disciplined financial management, and a shareholder-friendly approach.

Impact on Japanese Stocks and Market Reactions

Buffett’s continued endorsement has significantly influenced the share performance of these trading houses, driving long-term appreciation. However, in recent months, Japanese equities have faced headwinds, with the broader market struggling due to the yen’s strength, impacting exporters. The Topix index has declined by approximately 1.7% in 2025, contrasting with the MSCI Asia Pacific Index’s 4.6% gain. Despite the short-term fluctuations, Berkshire’s commitment signals confidence in Japan’s long-term economic trajectory, reinforcing the stability of these firms.

Financial Strategy and Dividend Income Growth

Berkshire Hathaway anticipates receiving $812 million in dividend income from these investments in 2025. Buffett has praised Japan’s trading houses for their prudent financial policies, including responsible dividend increases and share buybacks, while maintaining conservative executive compensation practices compared to their U.S. counterparts. This disciplined approach aligns with Berkshire’s preference for stable, long-term returns.

To hedge against currency fluctuations, Berkshire has strategically issued yen-denominated bonds, mitigating foreign exchange risks without engaging in speculative currency trading. This cautious financial strategy underscores the firm’s focus on preserving capital and ensuring sustainable investment growth in international markets.

Future Collaboration and Expansion Prospects

Beyond equity ownership, Berkshire Hathaway is exploring potential collaborations with Japanese trading firms. Mitsubishi Corp. has confirmed ongoing discussions with Berkshire regarding joint investment projects, signaling a deeper partnership in strategic sectors. The company reaffirmed its commitment to enhancing corporate value and boosting shareholder returns over the medium to long term.

Berkshire’s decision to hold its Japanese investments for "many decades" reinforces its belief in the strength and resilience of these businesses. As the global investment landscape evolves, Buffett’s continued engagement with Japan’s leading trading houses highlights a shift toward markets offering stability, shareholder value, and growth opportunities.

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