Berkshire Hathaway Raises Stakes Above 10% in Five Japan Trading Houses

Warren Buffett's Berkshire Hathaway has increased its stake in Japan's Mitsubishi Corporation to 10.23% from 9.74%, marking a deepening investment in Japanese trading houses after negotiating the removal of a 10% investment cap. This move reflects Berkshire's confidence in the medium- to long-term growth prospects of Mitsubishi and Mitsui & Co, as well as a broader strategy involving five major Japanese trading firms including Itochu, Marubeni, and Sumitomo. Berkshire leverages low-cost yen debt to gain attractive returns from these companies, which trade at reasonable valuations and generate steady cash flows linked to commodities. Mitsubishi's shares rose following the announcement, highlighting positive market reaction to Berkshire's expanded holdings. The Japanese trading houses have been focusing on enhancing shareholder returns through buybacks and dividends, making them appealing long-term bets amid global geopolitical uncertainties. Berkshire's Japan portfolio, valued at $23.5 billion as of late 2024, exemplifies Buffett's value investing approach in international markets while maintaining a significant cash reserve.