Warren Buffett's firm raises stakes in Japanese trading houses as Nikkei hot streak continues

FILE - Berkshire Hathaway Chairman and CEO Warren Buffett smiles during an interview in Omaha, Neb., May 7, 2018. Buffett's company has increased its investments in five major Japanese trading houses to give Berkshire Hathaway control of 7.4% of each of those conglomerates. Buffett disclosed the new investments Tuesday, April 11, 2023, in interviews with Nikkei and CNBC while he is visiting Tokyo this week to meet with executives at the Japanese companies. (AP Photo/Nati Harnik, File) (Nati Harnik, Copyright 2018 The Associated Press. All rights reserved.)

OMAHA, Neb. – Billionaire Warren Buffett is upping his bet on Japan, announcing this week that Berkshire Hathaway will increase its ownership stake in five major Japanese trading houses.

The first Berkshire Hathaway investment in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp., a 5% stake, was disclosed in 2020 and earlier this year Buffett said that the stake had been increased to 7.4%. Ownership in the companies, Berkshire said this week, has reached 8.5% excluding shares of treasury stock.

The trading houses are some of Japan’s oldest and biggest companies and hold investments in a variety of industries. Their conglomerate business models are somewhat similar to Buffett’s own company which owns dozens of companies including BNSF railroad, several major utilities and Geico insurance while also investing more than $300 billion in stocks.

Buffett's timing is notable.

In 2021, after Berkshire Hathaway had taken a stake in the five trading houses, Japan's Nikkei average recorded its highest year-end closing level since the 1980s when the market bubble in Japan was near its peak. Last week, the Nikkei closed over 33,000 for the first time in 33 years and it is up almost 30% over the past 12 months.

Berkshire Hathaway Inc. is based in Omaha, Nebraska.