Buffett‘s Japan Investments Soar, and JPMorgan Predicts More to Come
Warren Buffett’s investment in Japan’s top five trading houses – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo - is proving to be a remarkably prosperous venture, even as the “Oracle of Omaha” approaches his 90s. Berkshire Hathaway began building positions in these companies in August 2020,acquiring over 5% stakes in each.
Since then, the stocks have more then tripled in value, with one performer surging over 500%, according to JPMorgan.The investment bank attributes this dramatic growth, in part, to the ”Buffett effect” – the positive market reaction to Berkshire’s involvement. JPMorgan notes that Berkshire’s presence as a major shareholder has also increased management’s focus on shareholder value and strategic capital allocation.
As of the end of 2024, Berkshire’s initial $13.8 billion investment has grown to a market value of $23.5 billion. Buffett initially discovered these companies while reviewing a directory of Japanese publicly traded firms, attracted by their low valuations, reliable dividends, and diversified, cash-generating businesses.
Beyond capital thankfulness, the investment allows Buffett to effectively hedge currency risk by capitalizing on the difference between dividends earned and interest paid on yen-denominated debt. Berkshire anticipates $812 million in dividend income from these investments in 2025, offset by $135 million in interest payments.
JPMorgan believes Berkshire is not finished investing in the sector, expecting continued, moderate increases in their stakes. Berkshire has already exceeded the initial 10% ownership ceiling in Mitsubishi and Mitsui.Buffett has publicly stated his long-term commitment, declaring, “We will not be selling any stock. That will not happen in decades, if then.” He and his successor, Greg Abel, view the investment as a long-term hold, a testament to the enduring appeal of these Japanese trading houses.
