Berkshire Hathaway Adds to Japanese Holdings Amid a Booming Stock Market
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Berkshire Hathaway Adds to Japanese Holdings Amid a Booming Stock Market

Berkshire Hathaway's holdings in five major Japanese trading houses have reached an average of 8.5%.
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Berkshire Hathaway has added to its existing holdings in five major Japanese trading houses, bringing its average ownership of the companies to more than 8.5%. The investment firm, led by prominent investor Warren Buffett, aims to further add to its positions in the future. 

Warren Buffet’s Berkshire Hathaway Remains Bullish on Japanese Market

On Monday, Berkshire Hathaway announced that it had purchased additional shares in five top Japanese trading houses, including Itochu, Marubeni, Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp, according to a report from Nikkie Asia. The report added that Berkshire’s holdings in four out of the five companies now surpass 8%. 

More specifically, Berkshire’s holdings in Mitsubishi Corp’s outstanding shares now stand at 8.31%, up from 6.59%. The shareholding of Mitsui & Co., Itochu, Marubeni, and Sumitomo Corp. also rose from 6% to 7-8%. Berkshire now holds around 2.8 trillion yen in shares.

In a comment to Nikkie Asia, Buffett reportedly reiterated its intention to hold these stakes for the long term. He even claimed that he wants to own up to 9.9% of the five companies, implying that the billionaire aims to keep adding to his holdings in Japan. 

Investors Flock to Japan after Buffet Reveals Investment

In April, Buffett declared that he possessed more stocks in Japan than any other country apart from the US. He added that Berkshire, which started purchasing shares in all five of Japan’s biggest trading houses almost three years ago, had expanded each stake to 7.4% by April.

The announcement led to increasing interest in Japanese equities. Throughout April, foreign investors purchased a net $15.6 billion worth of Japanese shares, the highest monthly level in several years, according to data from the Japan Exchange Group. The data showed they have continued to add to their positions in May. 

This also triggered a rally in Japanese equities, which reached a 33-year high by mid-May. “This market has just been long, long overlooked,” Kei Okamura, a Japanese equities portfolio manager at Neuberger Berman, said at the time. “It’s a very long taxi runway, but when the plane takes off, it takes off.”

Nevertheless, Japan Nl225, commonly called Nikkei Stock Average, or Nikkei 225, is up 29.54% YTD. The index is up around 3% over the past 5 days and more than 7% over the past month. 

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Japan’s Crypto Ecosystem Resumes Growth

Last week, Tokyo-based global information technology solutions company Fujitsu revealed that it aims to launch the Fujitsu Web3 Acceleration Platform on June 30. The platform will leverage ConnectionChain blockchain technology to connect different economies and streamline cross-border securities settlements in regions such as Japan, China, South Korea, and other Southeast Asian nations. 

Furthermore, Fujitsu is one of the Japanese companies involved in establishing a “Japan Metaverse Economic Zone.” The company and 10 other Japanese tech firms have agreed to advance Japan’s metaverse plans by building an open metaverse infrastructure called “Ryugukoku.”

Japan recently increased its regulatory measures to tackle anti-money laundering (AML) issues. In a move to align the country’s legal framework with the global standards of the FATF, Japan’s cabinet implemented tougher AML regulations last month, requiring the tracking of all cryptocurrency transactions. 

One significant element of this revised framework is enforcing the “travel rule.” Financial institutions must now disclose information on customers who conduct crypto asset transactions, such as their names and addresses. This ensures full disclosure of customer information between financial institutions.

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Why do you think Buffett is so bullish on Japanese equities? Let us know in the comments below.