Berkshire Hathaway remains dedicated to its Japanese investments for the long term and has secured an agreement with the five companies to exceed its initial 10% ownership cap, Warren Buffett stated in his annual letter to shareholders released on Feb. 22, 2025. In 2023, Buffett had said he liked these stocks’ earnings yields and dividends and may consider additional investments (see: Japanese ETFs Hit Multi-Decade High on Buffett’s Approval & Other Factors).
The conglomerate’s Japanese investments include five major trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These companies, known as “sogo shosha,” operate across multiple sectors both domestically and internationally—similar to Berkshire Hathaway itself. Berkshire first acquired stakes in these firms in July 2019.
At the end of 2024, the market value of Berkshire’s holdings in these five companies stood at $23.5 billion, with an aggregate cost of $13.8 billion. Buffett highlighted their strong management, investor relationships, and capital deployment strategies as key factors in Berkshire’s continued investment.
To finance these acquisitions, Berkshire has sold Japanese debt, taking advantage of yen-denominated bonds to mitigate foreign exchange risks. The company reported $2.3 billion in after-tax gains from its Japanese bonds, including $850 million in 2024 alone, due to an 11% appreciation of the U.S. dollar against the yen.
Buffett estimates that Berkshire’s annual dividend income from its stakes in the five Japanese trading houses will amount to approximately $812 million.
Despite Berkshire’s confidence, the five Japanese trading houses have faced challenges over the past year. Itochu and Marubeni have each declined by more than 8%, while Mitsubishi has dropped 26%. Mitsui and Sumitomo have also seen losses of 16% and 10%, respectively, during this period.
Although the Japanese central bank has been hiking rates lately, going against the trend of most central banks, rates are still low in Japan – a key factor normally required for the stock rally. Moreover, the Japanese economy has been in decent shape.
Japan’s GDP grew by 0.7% sequentially in Q4 of 2024, accelerating from an upwardly revised 0.4% expansion in Q3 and surpassing market expectations of 0.3%, preliminary data showed.This marked the third consecutive quarterly growth.