Why Berkshire Hathaway is Expanding Its Investments in Japan?

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Berkshire Hathaway (BRK.B) has been steadily increasing its stakes in Japan’s five companies — Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo — since initiating investment in July 2019. These companies operate across diverse sectors, such as energy, commodities, logistics, and technology. Known for prudent management, disciplined capital allocation, and shareholder-friendly practices like dividends and buybacks, they fit well within Berkshire’s long-term investment framework. By the end of 2024, Berkshire’s aggregate investment cost stood at $13.8 billion, while the market value of its stakes had grown to $23.5 billion.Several dynamics underpin Berkshire’s continued expansion in Japan. Corporate governance reforms have enhanced transparency and capital efficiency, making Japanese companies more attractive to foreign investors. Meanwhile, Japanese companies trade at relatively modest valuations compared to U.S. peers, offering compelling opportunities for stable returns.Berkshire has also structured its financing strategically. By issuing yen-denominated bonds, it has limited currency exposure while capitalizing on Japan’s low-cost debt environment. In 2025, the conglomerate is estimated to receive about $812 million in annual dividends, while incurring only $135 million in interest expenses. Favorable yen-dollar movements have added further upside, delivering billions in after-tax gains.Beyond near-term income, these holdings grant Berkshire exposure to enterprises that underpin Japan’s industrial and resource networks, while creating optionality for deeper partnerships in Asia. Overall, Berkshire’s growing investments in Japan enhance recurring income, broaden geographic diversification, and strengthen its long-term earnings resilience in an uncertain global landscape.What About Other Insurers?MetLife MET, a major U.S. insurer, has built a strong, long-term presence in Japan. MetLife’s most transformative move was acquiring Alico in 2010, positioning MetLife as a leading force in Japan’s life insurance sector and reinforcing its strategic growth ambitions in Asia.Aflac Incorporated AFL established Aflac Ventures Japan in 2019 to invest in cancer care, HealthTech, and InsurTech startups, fostering innovation for Aflac Life Insurance Japan. Earlier in 2018, Aflac converted its Japanese branch into a subsidiary. Today, Japan remains a vital revenue driv...

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