Berkshire Hathaway billionaire Warren Buffett is turning his focus on Japan, giving the country’s major trading houses a boost.
Key Details
- Buffett recently raised his holdings in Japan’s major trading houses to 7.4%—up from 5% in 2020. He has plans to further invest in the country’s stocks, Bloomberg reports.
- The billionaire is meeting with business leaders in Japan to learn more about their various businesses and “emphasize our support.” Buffett did not name which companies he was meeting with.
- In an interview with Nikkei, Buffett compared Japan’s five largest trading houses to Berkshire and indicated that he would be willing to do business with them.
- While the 92-year-old investor does not have a major stake in any Japanese companies, he told Nikkei, “There are always a few I’m thinking about.”
Why it’s news
Warren Buffett’s investment moves are closely watched because he is very selective and cautious, so when he does make a move, it generally has long-term value. And Japan has not been a major investor center.
Buffett’s interest in these trading houses and Japanese businesses indicates that he considers these entities to be well-managed and potentially undervalued, characteristics he often looks for when making investment decisions, Bloomberg reports.
The trading houses Buffett is interested in are called “sogo shosha” in Japan and have been linked to the nation’s economy for hundreds of years. They have provided the country with everything from energy to food.
Already, the trading houses are feeling the benefits of Buffett’s interest. The largest trading house, Mitsubishi Corp., climbed 3%—the greatest increase since March 1. Mitsui & Co. enjoyed a larger boost of 3.7%. The other houses, Marubeni Corp., Sumitomo Corp., and Itochu Corp. also saw gains.
While Buffett’s investment would benefit the trading houses, his interest alone could boost them. After Buffett’s comments, other investors could be encouraged to take a closer look at Japanese stocks.
For the last three weeks, foreign investors have net sold Japanese stocks and futures on the Tokyo Stock Exchange. Not counting the Japan Index, the MSCI Asia Pacific has declined 8.6% in the last year, Bloomberg reports.
Buffett’s remarks could give the market a needed boost, though it is still unclear how long it will enjoy that lift.
