Warren Buffett Invests More Money In Japanese Stocks

Despite the fact that Berkshire Hathaway Inc. launched its yen bond sale just a few days ago, it seems that the billionaire investor is turning his attention once again to Japan with the billionaire investor that he is considering boosting his stock investments in the country. 

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Stocks of Japan's major trading houses have jumped after Buffett highlighted in a recent interview with the newspaper that he has increased his holdings in these companies to 7.4% from around 5% in 2020, and is looking to increase his exposure to Japan's stocks. 

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As Buffett is currently in Japan, he plans to meet with different company leaders to discuss the business of the companies he is associated with, while emphasizing his support for them without naming them.

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According to Buffett, the five largest trading houses in Japan would be good business partners for Berkshire. 

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"We'd love it if one of the five came to us and said they're planning something big or buying something and would like a partner. "

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While he does not own stakes in other major Japanese companies, he is "always thinking about" some. 

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As Buffett hunts for more bargains, he gains $4.5 billion from Japan

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Buffert’s interest in Japan reminds investors of the attractive and well-priced investment opportunities there. We know that he would prefer well-managed companies that enjoy economic moats that he believes are undervalued based on his preferences.

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There are hundreds of years of history behind Japan's trading houses - or "sogo shosha" - which provide everything from energy to food. 

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Value Stocks

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Mitsubishi Corp., the country's biggest trading house, spiked up as much as 3%, the highest gain since March 1. Mitsui & Co., meanwhile, soared as much as 3.7%, while Marubeni Corp., Sumitomo Corporation, and Itochu Corporation were also able to extend gains. Japan's Topix climbed by more than 2% following the report.

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According to Hiroshi Namioka, chief strategist at TDG Asset Management, Buffett's remarks may be an encouragement for foreign investors to pick up Japanese shares, particularly value stocks, as a result of his remarks. 

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After the international banking crisis in March, foreigners have net sold Japanese stocks and futures on the Tokyo Stock Exchange, but they have also remained net buyers so far this year, despite the fact that foreigners have sold Japanese stocks. The MSCI Asia Pacific excluding Japan Index has fallen 8.6% over the past 12 months, compared to a 0.8% decline in the broader Topix Index over the same period. 

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As a result of his investment a few years ago, the market did not erupt much in the short term, except for those stocks he chose. However, a moderately positive impact was seen on foreign perceptions of Japan's market in the intermediate to long term, according to Nikko Asset Management Co. Chief global strategist John Vail says domestic optimism would also benefit from this. 

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Several Japanese trading houses have already experienced gains in the past year since companies such as Mitsubishi and Mitsui expanded buyback programs in February. Increasing energy prices have also boosted company earnings. Over the past year, shares of Mitsubishi's largest trading company have gained 14%, compared to 5.4% for the broader Topix index. 

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Additionally, Berkshire's US holding company is set to price new bonds this week. A person familiar with Berkshire has told me the company has already begun marketing a seven-tranche bond sale that will be used for general corporate purposes, including refinancing some debt. 

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Speculation about the BOJ's easing policies drove yield premiums higher this year, leading the legendary investor's company to offer wider credit spreads on tranches in the new deal. 

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The Omaha, Nebraska-based Berkshire Company is among the largest foreign issuers of yen bonds, Bloomberg reports. After selling one of the largest yen bond deals by an overseas company in 2020, the company surprised the Japanese markets by buying shares in local trading companies. 

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Taking over this month, Bank of Japan governor Kazuo Ueda said he wasn't expecting any significant changes to the country's monetary policy for now. 

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