The billionaire investor Warren Buffett, who owns a company called Berkshire Hathaway, has recently increased his investments in Japan’s largest trading companies. This move has played a significant role in pushing Japan’s stock market to reach its highest levels in several years.
On Monday, Berkshire Hathaway announced that it now owns more than 8.5% of Itochu, Marubeni, Mitsubishi Corp, Mitsui & Co, and Sumitomo, on average. This follows their initial purchases in 2020, and it aligns with their long-term plan to hold these stocks and potentially increase their ownership to as much as 9.9%.
Warren Buffett’s investments and his positive outlook on Japan’s future have attracted attention to the country’s improving economy and corporate governance reforms that benefit shareholders. These factors have contributed to a remarkable surge in the Nikkei share average, which has experienced ten weeks of consecutive gains and has risen by 28% this year.
Market strategist Charu Chanana from Saxo Markets in Singapore stated, “The favorable conditions for Japanese stocks are continuing to grow. While it was previously suggested that Berkshire Hathaway would increase its stake, the announcement has come earlier than expected, which will further increase optimism in the Japanese stock market.”
Buffett’s Bets on Japan Could Pay Off Big
Berkshire Hathaway has revealed that the combined value of its investments in these Japanese trading houses is the largest among all its publicly-held stocks outside the United States.
Japanese trading houses, known as “sogo shosha,” engage in a wide range of activities involving materials, products, and food. They often act as intermediaries and provide logistical support.
The stocks of these trading houses have all experienced significant growth this year, with Marubeni shares leading the way with a remarkable 62% increase. Since the end of 2020, Marubeni’s stock price has more than tripled.
According to regulatory filings made by the trading firms on June 12, Berkshire Hathaway holds approximately 7.4% of Itochu’s stock, 8.3% of Marubeni and Mitsubishi’s stock, 8.1% of Mitsui’s stock, and 8.2% of Sumitomo’s stock.