Buffett’s Berkshire Hathway bets bigger on Japan, ups stake in 5 Japanese trading firms to 10%

Warren Buffett, Chairman and CEO of Berkshire Hathaway

As Berkshire Hathaway trims its exposure to US equities, Warren Buffett is doubling down on Japan. The legendary investor has increased stakes in five major Japanese trading firms, namely, Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo-- raising holdings by over one percent each to between 8.5 percent and 9.8 percent, according to a regulatory filing.

Buffett has long been vocal about his confidence in Japan’s “sogo shosha”  or trading houses that operate across diverse industries both domestically and internationally. Comparing them to Berkshire itself, he first invested in these firms in 2019 and publicly revealed the positions on his 90th birthday in August 2020, describing the opportunity as “confounding” and praising their strong dividend growth.

In his 2024 annual letter, Buffett reiterated Berkshire’s long-term commitment to these investments, disclosing an agreement with the firms that allows Berkshire to exceed the initial 10 percent ownership cap. As of end-2024, Berkshire’s Japanese holdings were valued at $23.5 billion, compared to an aggregate cost of $13.8 billion. Buffett has praised the companies’ management, investor relations, and capital allocation strategies.

Beyond equity stakes, Buffett is also employing a currency-hedging strategy, selling Japanese debt while benefiting from the difference between dividends received and bond coupon payments owed.

His conviction in Japan was further reinforced in 2023, when he travelled to the country with his designated successor, Greg Abel, to meet with trading firm executives. Buffett has since expressed a desire for Berkshire to hold these investments indefinitely.

Meanwhile, his stance on US stocks has turned notably bearish. In 2024, Berkshire sold over $134 billion in equities, significantly reducing its positions in Apple and Bank of America. As a result, the firm’s cash reserves have swelled to a record $334 billion, signalling Buffett’s cautious approach amid ongoing market uncertainty.

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