In a move that underscores Warren Buffett’s unwavering confidence in Japan’s economic resurgence, Berkshire Hathaway Inc. has elevated its ownership in Mitsubishi Corp. to 10.23%, crossing a key psychological threshold for the first time. This increase, executed through its wholly-owned subsidiary National Indemnity Company, boosts the stake from 9.74% and signals a continued expansion of Berkshire’s Japanese portfolio amid shifting global investment landscapes. The announcement, made by Mitsubishi on August 28, 2025, not only highlights Buffett’s long-term value investing philosophy but also reignites interest in Japan’s venerable trading conglomerates, known as “sogo shosha.”
Quick Summary
- Buffett Boosts Mitsubishi Stake: Berkshire Hathaway increased its Mitsubishi Corp. stake to 10.23%, crossing the 10% threshold for the first time, signaling strong confidence in Japan’s trading houses.
- Strategic Japanese Investments: Berkshire’s holdings in five sogo shosha (Mitsubishi, Mitsui, Itochu, Marubeni, Sumitomo) are valued at $23.5 billion, funded by yen-denominated debt to hedge currency risk.
- Market Outperformance: These trading houses gained 4.46% in a week when the Nikkei 225 fell 4.19%, with analysts noting they remain undervalued by over 20%.
- Long-Term Commitment: Buffett plans to hold these stakes for decades, praising the firms’ shareholder-friendly policies and disciplined management.
Table of Contents
The Genesis of Buffett’s Japanese Odyssey
Warren Buffett’s foray into Japanese equities began quietly in 2019, a period when many international investors were wary of the archipelago’s stagnant growth and deflationary pressures. Berkshire Hathaway, the conglomerate Buffett has helmed since 1965, initially accumulated stakes in five major trading houses: Mitsubishi Corp., Mitsui & Co., Itochu Corp., Marubeni Corp., and Sumitomo Corp. These positions were disclosed in August 2020, coinciding with Buffett’s 90th birthday, and represented an initial outlay of approximately $6 billion to $13.8 billion, depending on varying reports.
The appeal of these companies lies in their diversified business models, which span commodities trading, energy production, logistics, retail, and even emerging sectors like renewable energy and technology. Unlike many Western conglomerates, these sogo shosha operate with a global footprint, managing vast supply chains that touch everything from oil and gas to salmon farming and convenience stores. Buffett has often likened them to Berkshire itself—sprawling entities focused on efficient capital allocation rather than flashy growth narratives.
By the end of 2024, the market value of Berkshire’s holdings in these five firms had ballooned to $23.5 billion, a testament to both share price appreciation and strategic accumulation. This growth occurred against a backdrop of Japan’s Nikkei 225 index surging to record highs, fueled by corporate governance reforms, improved shareholder returns, and a weakening yen that bolstered export-oriented businesses.
Buffett’s strategy has been methodical and patient. In March 2025, Berkshire raised its stakes across the board to levels between 8.5% and 9.8%, approaching but not exceeding the self-imposed 10% cap that Buffett had pledged to respect to avoid triggering regulatory scrutiny or perceptions of control ambitions. However, Japanese regulators and the companies themselves granted leeway earlier this year, allowing Berkshire to push beyond this limit without seeking board seats or operational influence. Buffett has repeatedly emphasized that these are passive, long-term investments, with no intention of exceeding 20% ownership in any single firm.
Details of the Latest Stake Gains
The most recent disclosure reveals that National Indemnity Company, Berkshire’s insurance arm, acquired additional shares in Mitsubishi Corp., elevating its voting rights to 10.23%. This positions Berkshire as Mitsubishi’s largest shareholder, a milestone that carries symbolic weight in Japan’s corporate culture, where crossing 10% often implies deeper commitment and influence.
Concurrently, Berkshire also augmented its stake in Mitsui & Co., though it remains below the 10% mark—rising from 9.82% in March. Across the portfolio, ownership levels now vary: 10.23% in Mitsubishi, around 9.8% in Mitsui, and lower figures in the others, such as 8.53% in Itochu. These adjustments were financed ingeniously through yen-denominated bonds, a tactic that hedges against currency fluctuations while capitalizing on Japan’s ultra-low interest rates.
This financing method is a masterstroke in Buffett’s playbook. By borrowing in yen at rates far below U.S. equivalents, Berkshire generates positive carry: the dividends from these holdings, estimated at $812 million annually, far exceed the $135 million in interest costs on the debt. This approach not only protects against yen depreciation but also amplifies returns in a low-yield environment. As Buffett noted in his annual letters, this structure allows Berkshire to “earn huge net positive cash flow while holding these shares.”
Why Japan? Buffett’s Rationale and Praise
At the heart of Buffett’s enthusiasm is a belief in undervalued assets with strong fundamentals. Japan’s trading houses trade at modest valuations—often below book value—with robust balance sheets and consistent dividend payouts. Morningstar analysts project these firms will deliver returns on invested capital exceeding their weighted average cost of capital for the next five years, with undervaluation estimates exceeding 20%.
Buffett has been vocal about his admiration for Japanese corporate practices. In interviews and shareholder letters, he has lauded their conservative executive compensation—far below U.S. levels—their focus on shareholder-friendly policies like buybacks and dividends, and their disciplined capital allocation. “These aren’t trades,” Buffett has said. “These are assets to be held for generations.” His designated successor, Greg Abel, maintains ongoing dialogue with the companies’ leadership, ensuring alignment with Berkshire’s long-horizon ethos.
This contrasts sharply with Buffett’s recent pullback from U.S. equities, where high valuations and economic uncertainties have prompted sales of stakes in companies like Apple Inc. and Bank of America. Japan, with its improving governance—spurred by initiatives like the Tokyo Stock Exchange’s push for better capital efficiency—offers a haven for value hunters.
Market Reaction and Performance Context
The announcement sparked immediate market enthusiasm. Mitsubishi Corp.’s shares on the Tokyo Stock Exchange jumped nearly 3% intraday, closing up 1.85%, while peers like Mitsui saw similar gains. This rally occurred despite a broader market dip, highlighting the “Buffett premium”—the tendency for stocks to surge on news of his involvement.
Broader performance data underscores the resilience of these trading houses. In early March 2025, when the Nikkei 225 declined 4.19%, the five sogo shosha averaged a 4.46% gain. Since 2019, Mitsubishi’s stock has soared 227%, outpacing many global indices. Analysts like Norikazu Shimizu from Iwai Cosmo Securities note that Berkshire’s endorsement draws renewed attention, encouraging these firms to enhance shareholder returns through aggressive buybacks.
On social media platform X (formerly Twitter), reactions were overwhelmingly positive. Investors hailed the move as a “bullish signal,” with one user noting it could “spur sector-wide re-ratings” due to diversified exposure in commodities and energy. Another emphasized the psychological boost: “Breaching 10% flashes confidence and draws in copycat institutions.” Spanish investor Marc Garrigasait highlighted Berkshire’s consistent buying since 2019, positioning it as Mitsubishi’s top shareholder.
Implications for Investors and the Japanese Economy
This development has broader ramifications. Japan’s economy expanded 0.3% in Q2 2025, marking five consecutive quarters of growth and exceeding forecasts. Despite recent Bank of Japan rate hikes, borrowing costs remain low, supporting equity rallies. Buffett’s actions could attract more foreign capital, accelerating Japan’s shift from deflation to sustainable growth.
For retail investors, the news spotlights Japan-focused ETFs. Funds like the iShares MSCI Japan Value ETF (EWJV), WisdomTree Japan SmallCap Dividend Fund (DFJ), and Franklin FTSE Japan Hedged ETF (FLJH) have outperformed the S&P 500 recently, offering diversified exposure to Buffett’s favored sectors. These vehicles allow individuals to ride the wave without picking individual stocks.
However, risks persist. Currency volatility, geopolitical tensions in Asia, and commodity price swings could impact these conglomerates. Yet, Buffett’s track record—transforming Berkshire into a $1 trillion behemoth—suggests his bets are rarely impulsive.
Looking Ahead: A Multi-Decade Commitment
Buffett has pledged to hold these positions for “many decades,” with no plans to sell even in his absence. In a 2023 Nikkei interview, he expressed pride in the investments, and his 2024 shareholder letter reiterated the commitment to not divest for 50 years. As global markets grapple with inflation and recession fears, Berkshire’s pivot to Japan exemplifies a contrarian approach: seeking value where others see stagnation.
In essence, this stake increase is more than a transaction—it’s a vote of confidence in Japan’s corporate renaissance. As one X user aptly put it, “Buffett sees undervalued companies, reliable dividends, and conservative management.” For investors worldwide, it’s a reminder that patience and fundamentals often trump short-term hype. With Berkshire now firmly entrenched above 10% in Mitsubishi, the Oracle of Omaha’s Japanese chapter is far from over.