Buffett’s Big Bet on Japan
How Berkshire Hathaway is Reshaping the Future of Japanese Trading Giants
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Buffett’s Big Bet on Japan: How Berkshire Hathaway is Reshaping the Future of Japanese Trading Giants
There are very few people in the world who can make a stock rally just by expressing interest in a company. Warren Buffett is one of them.
When the Oracle of Omaha makes a move, markets listen. And when he decides to go all in on Japan, investors around the world sit up, take notes, and adjust their portfolios.
Over the past few years, Buffett has been quietly making one of his biggest foreign investments in history—buying into Japan’s legendary trading houses, the “sogo shosha.”
These are corporate giants that have dominated Japan’s business landscape for over a century, serving as the backbone of the country’s global trade. Now, with Buffett’s Berkshire Hathaway increasing its stakes in these companies to nearly 10% each, it’s clear that this is not just a casual investment—it’s a long-term conviction bet.
How It All Started: Buffett’s Move Into Japan
Back in 2020, when the world was still reeling from the economic fallout of the pandemic, Buffett did something unexpected. While most investors were hesitant about international markets, he bought stakes in five of Japan’s biggest trading houses:
Itochu Corporation
Marubeni Corporation
Mitsubishi Corporation
Mitsui & Co., Ltd.
Sumitomo Corporation
At the time, Berkshire Hathaway disclosed that it had quietly accumulated about 5% stakes in these companies, spending a total of $6 billion to build those positions. For decades, Buffett had largely focused on U.S. markets, but this marked a significant pivot toward Japan, a country that had long been undervalued by Western investors.
Why Japan? Because these companies—despite their massive global reach—were trading at cheap valuations, had strong cash flows, and, most importantly, paid high dividends. The combination of stability, profitability, and an undervalued market was too good for Buffett to ignore.
Berkshire’s Japanese Holdings Today
Fast forward to 2025, and Buffett has doubled down. Berkshire Hathaway has steadily increased its holdings and now owns nearly 10% of each of these companies. As of the latest reports:
Itochu Corporation: 9.77% stake
Marubeni Corporation: 9.84% stake
Mitsubishi Corporation: 9.67% stake
Mitsui & Co., Ltd.: 9.82% stake
Sumitomo Corporation: 9.79% stake
That’s a staggering $23.5 billion investment, up from an initial cost of $13.8 billion—meaning Buffett has already made a $9.7 billion paper gain on these stocks. And that’s not counting the massive $812 million in annual dividends Berkshire is now collecting from them.
The "Japanese Berkshire Hathaways"
So what exactly do these companies do, and why is Buffett so interested? Unlike typical Western conglomerates, Japan’s trading houses are diversified business powerhouses, involved in energy, mining, retail, infrastructure, finance, and technology.
Essentially, they operate like mini-Berkshire Hathaways—allocating capital, making strategic acquisitions, and generating steady cash flow across multiple industries.
Mitsubishi Corporation is the largest of the five, with interests spanning everything from automotive to industrial gas.
Itochu Corporation has strong retail and consumer goods operations, owning brands like FamilyMart (Japan’s second-largest convenience store chain).
Mitsui & Co., Ltd. is heavily involved in commodities and energy, a sector Buffett understands well.
Marubeni Corporation has a strong agriculture and food trading division.
Sumitomo Corporation operates metal mining, real estate, and infrastructure projects worldwide.
Buffett has made it clear that he sees these companies as long-term bets, praising their management teams, strong cash flow, and capital allocation strategies. These are not speculative investments—they’re classic Buffett-style value plays, bought at a discount but built to last.
Why This Move is Genius
There are several reasons why Buffett’s Japanese investment could be one of his smartest bets yet:
Cheap Valuations: Even after significant gains, Japanese trading houses are still trading at low P/E ratios, much lower than comparable U.S. firms.
High Dividends: Buffett loves strong, predictable cash flow—and these companies pay high dividends, giving Berkshire a steady stream of income.
Global Reach with a Local Edge: These companies have international exposure, operating businesses in energy, retail, commodities, and finance across the world, but they're still deeply rooted in Japan—a country known for economic stability and disciplined corporate governance.
Currency Advantage: Japan’s currency, the yen, has been relatively weak compared to the U.S. dollar. Buffett has smartly issued yen-denominated bonds to fund his purchases, meaning he borrowed money at near-zero interest rates to invest in high-yielding stocks. Genius? Absolutely.
Market Reaction: Japanese Stocks Are Soaring
On the morning of March 17, following the announcement of Berkshire Hathaway's increased stake, the stock prices of Japan’s major trading houses saw a notable surge at their peak:
Mitsubishi Corporation: +2.83%, reaching 2,653.5 yen ($17.9)
Marubeni Corporation: +1.94%, rising to 2,446.5 yen ($16.5)
Itochu Corporation: +2.11%, climbing to 6,978 yen ($47)
Mitsui & Co., Ltd.: +2.15%, up to 2,823 yen ($19)
Sumitomo Corporation: +3.01%, increasing to 3,529 yen ($23.8)
It’s clear that Buffett’s confidence in Japan is inspiring a wave of investor enthusiasm—not just in these stocks, but in the broader Japanese market as well.
Japan’s Economy: Why Buffett is Optimistic
Beyond just individual companies, Buffett’s bet on Japan suggests that he sees strong long-term growth potential in the country’s economy. And the numbers back him up:
Japan’s GDP grew by 0.7% in Q4 2024, accelerating from 0.4% in Q3—beating market expectations of 0.3% growth.
Despite interest rate hikes by the Bank of Japan, the country’s economy remains resilient, showing signs of steady expansion.
Japan’s stock market is hitting multi-decade highs, with the Nikkei 225 Index surpassing 40,000 for the first time ever in February 2025.
What This Means for Investors
So what should long-term investors take away from Buffett’s big bet on Japan?
First, Japan is back on the map for global investors. After decades of sluggish growth and deflation, the country is finally showing signs of strong economic momentum. Buffett’s investment confirms that Japan is undervalued, profitable, and worth paying attention to.
Second, Buffett’s strategy proves that patience and value investing still work. These trading houses were ignored by most investors for years, but Buffett saw their deep value, strong management, and dividend potential. Now, they’re paying off in a big way.
Final Thoughts: A Classic Buffett Move
For decades, Buffett has followed a simple formula: buy great companies at good prices and hold them forever. With his growing bet on Japan, he’s proving once again that value investing never goes out of style.
And if history is any guide, when Buffett bets big, he usually wins.
For those looking to follow his lead, Japan might just be the next great long-term opportunity.
2 Solid Japanese Stocks to Watch
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