Berkshire continues to increase its holdings in Japan's "five major trading companies," with Buffett becoming a "major shareholder."

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Buffett is deepening his bet on Japan’s major trading houses by raising his stake in Mitsui & Co. to the level of a “major shareholder.”

According to a statement released Monday by Mitsui & Co., Berkshire Hathaway, led by Buffett, has increased its stake (based on voting rights) in the company to over 10%. The statement also noted that Berkshire may consider further increases.

This move is seen as Buffett’s latest signal of confidence in the Japanese market. Previously, Berkshire had already raised its stake in another major trading house, Mitsubishi Corporation, above the 10% threshold.

The market responded positively to the news. Mitsui & Co.’s share price extended earlier gains, rising as much as 2.2% before settling back to a 1.75% increase. Shares of several other major trading houses, including Mitsubishi Corporation, Itochu Corporation, Marubeni Corporation, and Sumitomo Corporation, also rose generally on Monday.

Investment Strategy Shift: Lifting the Shareholding Cap

This increase marks a subtle shift in Berkshire's investment strategy. Buffett first disclosed his investment in Japan's five largest trading houses (“sogo shosha”) in 2020. According to Buffett’s annual letter to investors published in February this year, Berkshire initially planned to keep its holdings in these companies below 10%.

However, the letter mentioned that these Japanese companies have agreed to “moderately” relax this shareholding cap. This change has paved the way for Berkshire to surpass the 10% threshold and become a “major shareholder,” enabling deeper involvement in the future development of these Japanese business giants.

“The ‘God of Investing’ is buying more, which is positive news for Japanese trading house stocks,” said Ryunosuke Shibata, an analyst at SBI Securities Co. Since Buffett’s first endorsement in 2020, these widely diversified companies (spanning from liquefied natural gas to salmon farming) have consistently outperformed the TOPIX index.

Analysts believe that Buffett's continued accumulation highlights the unique business value of Japan’s trading houses. Their highly diversified business structures give them stronger resilience than their overseas peers during periods of sharp commodity price fluctuations. In addition, these companies have recently placed greater emphasis on shareholder returns, further enhancing their investment appeal.

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