Buffett Strikes Again? Berkshire's Surprise Yen Bond Move Fuels Fresh Japan Bet Speculation

This article first appeared on GuruFocus.

Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) could be gearing up for another strategic move in Japan, after reportedly hiring banks for a new yen-denominated bond sale its second this year. The veteran investor's Omaha-based empire has become one of the biggest foreign borrowers in Japan's credit market, having sold nearly 2 trillion ($13 billion) of yen bonds since its 2019 debut. The timing is notable: global bond issuance has already climbed to a record of about $6 trillion this year, as investors chase yield in a market still flush with liquidity. Berkshire's double-A credit rating continues to attract demand, offering Japanese investors higher spreads than comparable local corporates.

Is BRK.A fairly valued? Test your thesis with our free DCF calculator.

Analysts say the bond plan could signal Buffett's quiet conviction that Japan remains a fertile hunting ground. Berkshire's stakes in Japan's five major trading houses Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo have already delivered extraordinary gains since the initial purchases in 2019. Hiroshi Namioka, chief strategist at T&D Asset Management, suggested the issuance may indicate Berkshire sees further investment opportunities in Japan, particularly across the country's trading conglomerates, which he described as still undervalued from a global lens. The logic fits Buffett's playbook: borrow cheaply in yen, reinvest patiently in cash-generating businesses with durable pricing power.

Tokyo's markets reacted swiftly. Shares of Sumitomo jumped 3.8%, while Mitsui and Itochu each added around 3%, outpacing the Topix. Itochu's rally was reinforced by a dividend hike and stock split, underscoring improving shareholder returns. Buffett has said Berkshire intends to keep its ownership in each firm below 10%, though those caps have been moderately relaxed leaving room for incremental expansion. As Berkshire's potential issuance takes shape, investors will be watching one figure closely: the total size of the bond sale, which could offer a telling read on both Buffett's appetite and the broader tone of Japan's credit markets.

View comments