(BRK.A), (BRK.B)
Warren Buffett’s confidence in Japanese stocks remains strong, as Berkshire Hathaway will continue increasing its investments in Japan. In his 2025 annual letter to shareholders, Buffett highlighted Berkshire’s growing commitment to the country, calling it a “small but important exception” to the company’s traditional U.S.-focused investment strategy.
Berkshire’s involvement in Japan began in July 2019, when it first purchased shares in five major Japanese trading houses: ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These firms operate in a manner similar to Berkshire itself—owning stakes in a wide range of businesses both in Japan and globally. Initially attracted by their low valuations, Buffett and Berkshire’s Vice Chairman of Berkshire – Non-Insurance Operations, Greg Abel, have grown increasingly impressed with their capital allocation strategies, management discipline, and shareholder-friendly policies.
A key factor in Berkshire’s admiration for these companies is their prudent approach to capital deployment. Buffett noted that the five firms increase dividends when appropriate, conduct share buybacks when sensible, and exhibit more restrained executive compensation practices compared to their U.S. counterparts. As a result, Berkshire has committed to being a long-term investor and an active supporter of their boards.
While Berkshire originally agreed to keep its ownership stake in each company below 10%, the firms have since agreed to moderately relax this limit, paving the way for further investment. At the end of 2024, Berkshire’s total cost basis in the five firms stood at $13.8 billion, while the market value of its holdings had grown to $23.5 billion—a testament to their strong performance.
In addition to stock investments, Berkshire has also steadily increased its yen-denominated borrowings at fixed interest rates, maintaining a currency-neutral position. While Berkshire does not speculate on future exchange rate movements, GAAP accounting rules require it to recognize currency gains and losses. In 2024 alone, Berkshire recorded $850 million in after-tax gains due to the strengthening U.S. dollar, contributing to a cumulative $2.3 billion currency gain.
Buffett sees Berkshire’s Japanese investments as a long-term commitment, expecting Greg Abel and future successors to hold and expand these positions for decades. Looking ahead, Berkshire also anticipates exploring new ways to collaborate productively with the five companies, strengthening its presence in Japan’s corporate landscape.
With Berkshire’s growing stake and its disciplined investment philosophy, Buffett’s bet on Japan continues to pay off—solidifying his reputation as one of the world’s most patient and strategic investors.
© 2025 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.