(Bloomberg) — Berkshire Hathaway Inc. increased its stakes in Japan’s biggest trading houses, a move that is expected to offer support to the wider Tokyo stock market.
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As foreshadowed three weeks ago in Warren Buffett’s annual letter to shareholders, filings to Japan’s finance ministry on Monday showed that Berkshire raised its stakes in Mitsubishi Corp., Marubeni Corp., Mitsui & Co., Itochu Corp. and Sumitomo Corp. The average holding across the five stocks increased by just over one percentage point to about 9.3%, according to the filings.
Buffett has indicated that the trading houses themselves have agreed to “moderately” relax a previous ceiling of 10% on his stakes, leaving room for further buying. His purchases in 2020 and 2023 added fuel to broad-based rallies in Japanese equities.
Investors cautioned that the wider impact may be more limited this time, as share markets in Japan and around the world struggle with the potential impact of tariffs on global economic growth.
“It may not have quite the same punch compared to a few years ago,” said Yugo Tsuboi, chief strategist at Daiwa Securities Group Inc. But there’s still room for Buffett to increase his stake, so investors will speculate and buy in the market tomorrow, he said.
Mitsubishi Corp.’s representative said Berkshire likely increased its stake on mid- to long-term growth expectations, and that it continues to engage in discussions on ways to collaborate. Itochu’s spokesperson said it expects Buffett’s stake to increase further, while Marubeni said it welcomes the investment.
While the increase wasn’t surprising, it may “provide a sense of security about buying Japanese stocks at a time when the Nikkei is seeing some weakness,” said Jumpei Tanaka, head of investment strategy at Pictet Asset Management Japan Ltd. “The environment surrounding Japanese equities is not as good as it used to be.”
The Nikkei 225 has dropped more than 6% this year while the broader Topix index is down just over 1%. Meanwhile in the US, the S&P 500 has dropped about 4.5%.
Investors had been speculating over Buffett’s next move after Berkshire sold a ¥281.8 billion ($1.9 billion) multi-tranche bond in October, its second yen bond deal in 2024.
The filings to on Monday showed Berkshire increased its holdings in Mitsui & Co. to 9.82% from 8.09%, Mitsubishi Corp. to 9.67% from 8.31%, Sumitomo Corp. to 9.29% from 8.23%, Itochu to 8.53% from 7.47% and Marubeni to 9.30% from 8.30%.
