"Stock God" Buffett says he will gradually increase holdings, Japan Trading Company's stock price soars in response.

After Berkshire Hathaway's plan to increase its holdings in Japanese stocks was seen as a recognition of the Japanese stock market, Japanese trading companies, including Mitsubishi Corp. and Marubeni Corp., saw their stock prices rise on Tuesday. As of the time of writing, Mitsubishi Corp. was up nearly 9%, Marubeni Corp. was up nearly 8%, and the stock prices of Mitsui & Co., Itochu Corp., and Sumitomo Corp. also surged. Meanwhile, the Tokyo Stock Exchange fell by 0.35%. Berkshire Hathaway had previously stated in 2020 that it had investments in the five largest trading companies in Japan. Berkshire Hathaway initially agreed to keep its ownership in these companies below 10%, but Buffett stated in his annual letter on February 22 that these trading companies had agreed to "modestly" relax the limit. Norikazu Shimizu, an analyst at IwaiCosmo Securities, stated, "The current trading prices of Japanese trading companies are far below their peak, so Buffett may see this as an opportunity to buy more stocks. With the significant changes in Trump's tariff policy, market uncertainty has increased, but trading companies have a wide range of businesses, so Buffett may see them as safe bets." It is reported that the business of these trading companies in Japan covers overseas oil and gas production, salmon farming, and TV shopping, among others. While these companies have benefited from the surge in commodity prices since 2022, their diversity in other areas has also helped them withstand price fluctuations. Marubeni stated in an email declaration that Buffett's interest "demonstrates a high degree of attention to the trading company sector, including our company." Itochu Corp. stated in a declaration that the company is in negotiations with Berkshire Hathaway regarding potential collaborations such as Duracell or Fruit of the Loom. Mitsubishi Corp. stated that the company is discussing cooperation on individual projects with Berkshire Hathaway, including through joint investments. Mitsui & Co. stated that they plan to continue discussions with Berkshire Hathaway. Buffett praised Japanese trading companies for increasing dividends at the right time, conducting stock buybacks "wisely," and not being as aggressive as their American counterparts in executive compensation. He stated, "Over time, you may see Berkshire increase its holdings in these five companies. Our holdings in these five companies are very long-term, and we are committed to supporting their boards." Hideyuki Ishiguro, chief strategist at Nomura Asset Management, stated, "Overall, this is favorable for trading companies' stocks and seems to provide investors with a sense of security." In recent years, Buffett has shown a keen interest in the Japanese market. Berkshire Hathaway issued yen bonds twice in 2024, with the total amount of yen-denominated bonds issued for the year reaching 545.1 billion yen, exceeding the 430 billion yen of the first bond issuance in 2019, setting a new record. In October 2024, the company issued yen bonds totaling 281.8 billion yen, second only to the first bond issuance in 2019. In his annual letter disclosed on February 22, Buffett mentioned that he will increase investments in Japan in the future. Regarding investing in Japan, Buffett expressed a strong liking for it, estimating that he will receive approximately $812 million in dividend income from investments in Japan this year, while the interest cost of the yen bonds is around $135 million. This means that Buffett may earn $677 million from the Japanese market this year.