Shares of Japan’s five major trading houses rose more than 5% in early trade on Tuesday after Warren Buffett revealed plans for Berkshire Hathaway (NYSE: BRKa) to increase its stakes in these companies.

The biggest gainer was Mitsubishi Corp, which surged 7.5%, while Mitsui & Co, Sumitomo Corp, Itochu, and Marubeni each saw gains exceeding 5%.

Buffett’s Growing Bet on Japan

In his annual shareholder letter, Buffett announced that the trading companies agreed to lift previous ownership limits that capped Berkshire’s stakes below 10%.

Key Highlights from Buffett’s Letter:

• Berkshire Hathaway has been investing in Japan’s trading houses since 2019.
• The total investment in these companies reached $23.5 billion by the end of 2024.
• Berkshire’s current holdings cost $13.8 billion, generating an anticipated $812 million in dividends in 2025.
• Buffett stated that Berkshire’s ownership will “increase somewhat” over time.

Despite these gains, Japan’s Nikkei 225 index dropped 1.57% as markets reopened following a public holiday.

Understanding Japan’s Trading Houses (Sogo Shosha)

These conglomerates operate across multiple sectors, acting as intermediaries in commodities, logistics, shipping, and steel production. Their diversified portfolios enhance their resilience against economic fluctuations, which is why Buffett views them as long-term value investments.

For further financial insights on trading houses, various APIs can provide detailed financial statements, profitability ratios, and valuation metrics.

Buffett’s Japan Strategy and Market Impact

Buffett’s decision to increase investments indicates a preference for stable cash flow, diversification beyond the U.S., and opportunities in undervalued stocks with strong returns. Interest from global investors looking for stable, dividend-paying stocks may continue to rise as a result.