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Berkshire Hathaway remains dedicated to its Japanese investments for the long term and has secured an agreement with the five companies to exceed its initial 10% ownership cap, Warren Buffett stated in his annual letter to shareholders released on Feb. 22, 2025. In 2023, Buffett had said he liked these stocks' earnings yields and dividends and may consider additional investments (see: Japanese ETFs Hit Multi-Decade High on Buffett's Approval & Other Factors).
Japanese Trading Houses in Berkshire’s Portfolio
The conglomerate’s Japanese investments include five major trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These companies, known as “sogo shosha,” operate across multiple sectors both domestically and internationally—similar to Berkshire Hathaway itself. Berkshire first acquired stakes in these firms in July 2019.
Current Market Value and Investment Strategy
At the end of 2024, the market value of Berkshire’s holdings in these five companies stood at $23.5 billion, with an aggregate cost of $13.8 billion. Buffett highlighted their strong management, investor relationships, and capital deployment strategies as key factors in Berkshire’s continued investment.
To finance these acquisitions, Berkshire has sold Japanese debt, taking advantage of yen-denominated bonds to mitigate foreign exchange risks. The company reported $2.3 billion in after-tax gains from its Japanese bonds, including $850 million in 2024 alone, due to an 11% appreciation of the U.S. dollar against the yen.
Buffett estimates that Berkshire’s annual dividend income from its stakes in the five Japanese trading houses will amount to approximately $812 million.
Recent Stock Performance of Japanese Trading Houses
Despite Berkshire’s confidence, the five Japanese trading houses have faced challenges over the past year. Itochu and Marubeni have each declined by more than 8%, while Mitsubishi has dropped 26%. Mitsui and Sumitomo have also seen losses of 16% and 10%, respectively, during this period.
Time for Japan ETFs?
Although the Japanese central bank has been hiking rates lately, going against the trend of most central banks, rates are still low in Japan – a key factor normally required for the stock rally. Moreover, the Japanese economy has been in decent shape.
Japan’s GDP grew by 0.7% sequentially in Q4 of 2024, accelerating from an upwardly revised 0.4% expansion in Q3 and surpassing market expectations of 0.3%, preliminary data showed.This marked the third consecutive quarterly growth.
Japan ETFs including First Trust Japan AlphaDEX Fund (FJP - Free Report) , iShares MSCI Japan Value ETF (EWJV - Free Report) , iShares MSCI Japan ETF (EWJ - Free Report) , and iShares JPX-Nikkei 400 ETF (JPXN - Free Report) have outperformed the SPDR S&P 500 ETF (SPY - Free Report) so far this year as well (as of Feb. 21, 2025).
Attractively-Valued Shares Despite Recent Surge
Despite the recent surge, Japanese stocks remain attractively valued, particularly compared to U.S. stocks. The ETFs like FJP, EWJV, EWJ, and JPXN have a P/E ratio of 5.92X, 9.08X, 12.72X, 12.22X, respectively against the S&P 500’s P/E of about 26.96X.
Will China’s Gain Boost Japan?
China is Japan's biggest trading partner. In an effort to bolster the struggling property sector and counter its adverse impact on the economy, China has introduced policy stimulus. Any improvement in China’s economy should give another leg-up to Japan’s export sector.
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Buffett Bets Big on Japan: ETFs to Play
Berkshire Hathaway remains dedicated to its Japanese investments for the long term and has secured an agreement with the five companies to exceed its initial 10% ownership cap, Warren Buffett stated in his annual letter to shareholders released on Feb. 22, 2025. In 2023, Buffett had said he liked these stocks' earnings yields and dividends and may consider additional investments (see: Japanese ETFs Hit Multi-Decade High on Buffett's Approval & Other Factors).
Japanese Trading Houses in Berkshire’s Portfolio
The conglomerate’s Japanese investments include five major trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These companies, known as “sogo shosha,” operate across multiple sectors both domestically and internationally—similar to Berkshire Hathaway itself. Berkshire first acquired stakes in these firms in July 2019.
Current Market Value and Investment Strategy
At the end of 2024, the market value of Berkshire’s holdings in these five companies stood at $23.5 billion, with an aggregate cost of $13.8 billion. Buffett highlighted their strong management, investor relationships, and capital deployment strategies as key factors in Berkshire’s continued investment.
To finance these acquisitions, Berkshire has sold Japanese debt, taking advantage of yen-denominated bonds to mitigate foreign exchange risks. The company reported $2.3 billion in after-tax gains from its Japanese bonds, including $850 million in 2024 alone, due to an 11% appreciation of the U.S. dollar against the yen.
Buffett estimates that Berkshire’s annual dividend income from its stakes in the five Japanese trading houses will amount to approximately $812 million.
Recent Stock Performance of Japanese Trading Houses
Despite Berkshire’s confidence, the five Japanese trading houses have faced challenges over the past year. Itochu and Marubeni have each declined by more than 8%, while Mitsubishi has dropped 26%. Mitsui and Sumitomo have also seen losses of 16% and 10%, respectively, during this period.
Time for Japan ETFs?
Although the Japanese central bank has been hiking rates lately, going against the trend of most central banks, rates are still low in Japan – a key factor normally required for the stock rally. Moreover, the Japanese economy has been in decent shape.
Japan’s GDP grew by 0.7% sequentially in Q4 of 2024, accelerating from an upwardly revised 0.4% expansion in Q3 and surpassing market expectations of 0.3%, preliminary data showed.This marked the third consecutive quarterly growth.
Japan ETFs including First Trust Japan AlphaDEX Fund (FJP - Free Report) , iShares MSCI Japan Value ETF (EWJV - Free Report) , iShares MSCI Japan ETF (EWJ - Free Report) , and iShares JPX-Nikkei 400 ETF (JPXN - Free Report) have outperformed the SPDR S&P 500 ETF (SPY - Free Report) so far this year as well (as of Feb. 21, 2025).
Attractively-Valued Shares Despite Recent Surge
Despite the recent surge, Japanese stocks remain attractively valued, particularly compared to U.S. stocks. The ETFs like FJP, EWJV, EWJ, and JPXN have a P/E ratio of 5.92X, 9.08X, 12.72X, 12.22X, respectively against the S&P 500’s P/E of about 26.96X.
Will China’s Gain Boost Japan?
China is Japan's biggest trading partner. In an effort to bolster the struggling property sector and counter its adverse impact on the economy, China has introduced policy stimulus. Any improvement in China’s economy should give another leg-up to Japan’s export sector.