Former Berkshire Hathaway chair Warren Buffett‘s last major trade was acquiring the OxyChem business from Occidental Petroleum for a whopping $9.7 billion. However, his most profitable trade this decade is undoubtedly his investments in Japan’s five major trading firms in 2019.
Dubbed one of Buffett’s most contrarian plays, Berkshire Hathaway created positions in five leading Japanese trading firms, with stakes of over 5% in each, for a total investment of $6.25 billion. Back then, Berkshire portrayed the investment as part of a long-term strategy, hinting that the company was open to boosting its stakes if the markets favoured.
In the past five years, Berkshire increased its stake in Japanese firms several times. The company started building positions in 2019, upping its stakes in 2023 and even last year. The investments are worth over $30 billion today. The massive profit could be attributed to Buffett’s value-investing strategy and policy changes in Japan, including corporate governance reforms and new pro-growth regulations that have supported technology firms.
While Berkshire is heavily invested in US stocks, which rallied hard in 2025, Buffett’s move shows the benefits of going global, as international markets continue to perform at par or better than US equities.
Buffett’s Investment in a Stagnant Japanese Market
When Berkshire started investing in diversified Japanese trading firms in 2019, the move wasn’t viewed as lucrative, as Japan’s stock market had barely grown for nearly three decades.
An asset market crash in 1989 triggered a prolonged period of stagnant growth for Japan. Despite a bleak market growth outlook, Buffett financed most of his Japan investments with cheap debt denominated in Japanese yen, which had a 1% interest rate. Note that the trading houses he invested in were paying dividends of around 4%, which easily covered financing costs.
Political dynamics also buoyed Buffett’s investments. Following decades of stringent economic governance, Japan has transitioned to pro-growth policies in recent years, which have driven its stock market to new highs.
Japan’s prime minister Sanae Takaichi even made the end of ‘excessive fiscal austerity’ central to her election campaign, which helped her party secure a landslide victory and a legislative majority.
Buffett’s Bet Appears Immune to Japan’s Technical Recession
Japan’s changing economic policy landscape raises multiple questions on the outlook for its stock market. Japan entered a technical recession in 2024 due to high inflation and fading domestic demand. Meanwhile, analysts have cautioned about a deteriorating debt crisis.
Despite these concerns, Buffett’s investments continue to soar. Global markets fared well in 2025 compared with the US. Last year, international stock markets gained 28%, well above the S&P 500’s 16% growth. Japan’s stock market index, Nikkei, also surged by a staggering 38.6% in 2025.
‘It’s worked out very well so far, but we’ll be in these stocks 10, 20 years,’ Buffett told a media outlet in 2023 regarding his Japan holdings.
Weakening US dollar, geopolitical tensions, tariffs, trade concerns, and US technology concentration are some factors that have driven capital outflows from the US to global markets; a trend that persists in 2026.
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