Berkshire Hathaway Inc. raised its stake in Japan's five largest trading houses to an average of more than 8.5%, in a move to double down on some of Buffett's favorite stocks, further illustrating It is prepared to invest in Japan for a long time.

Berkshire holds stakes in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. These five companies are the largest comprehensive trading companies in Japan. In August 2020, Berkshire announced for the first time that it had purchased more than 5% of the shares of these five major trading companies; investment. Buffett said at the time that Berkshire would increase its stake in the Japanese companies, sending their shares to record highs.

Specifically, Berkshire’s shareholding in Itochu increased from 6.21% to 7.47%; Sumitomo’s shareholding increased from 6.57% to 8.31%; Mitsui’s shareholding increased from 6.62% to 8.09%; Marubeni increased its stake from 6.75% to 8.3%. Since the beginning of this year, the stock price increases of these five major trading companies have attracted the market's attention. Marubeni and Mitsubishi Corporation have both risen by about 65%, Sumitomo Group has risen by more than 42%, Itochu Corporation's stock price has risen by more than 37%, and Mitsui & Co.'s stock price has also risen by nearly 20%.

In April, Buffett traveled to Japan for the first time and held whirlwind meetings with the executives of these companies, which both sides touted as successes. These conglomerates do everything from natural gas trading to salmon farming. Against the backdrop of high commodity prices and a weak yen, they announced a sharp jump in profits for the last fiscal year. With the backing of Warren Buffett, signs of stabilizing inflation and improving shareholder returns, including buybacks, pushed Japanese stocks to a 33-year high. The Topix Wholesale Trade Index, which includes Mitsubishi and other peers, has soared 39% this year, outpacing appliance makers.

"Nikkei Shimbun" described that Buffett's move to increase positions may make the market expect the stock prices of the five major trading companies to rise further. However, the upside for those companies' shares and Japan's overall stock market may be limited now that the market has priced in further Buffett buying, said Hiroshi Namioka, chief strategist at T&D Asset Management.

Buffett has made an estimated $4.5 billion in gains on his positions in Japanese trading companies so far in 2020, according to data compiled by the media. Berkshire plans to increase its investments in the five Japanese companies to 9.9% each. The company will not make acquisitions in excess of this percentage unless specifically approved by the investee's board of directors, the release said.

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