At Berkshire Hathaway’s (BRK.B) (BRK.A) annual shareholder meeting this weekend, CEO Warren Buffett made it clear that his bet on Japan is not just a strategic move — it’s a deeply held, long-term conviction. Speaking about Berkshire’s sizable stakes in five Japanese trading houses, Buffett said, “In the next 50 years... we won’t give a thought to selling those. Japan’s record has been extraordinary.”

The comment reflects a sharp evolution in Buffett’s perspective on Japan, a country he once openly avoided as an investment destination. In 1998, he famously dismissed opportunities there despite favorable borrowing conditions, saying Japanese firms offered “very low returns on equity.” But times — and his outlook — have changed.

Over the past six years, Berkshire has accumulated nearly 10% positions in Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. The investments, first made in 2019 and publicly disclosed in 2020, were originally viewed as a surprising pivot. At the May 2025 shareholder meeting, Buffett revealed just how foundational the holdings have become, noting, “We will not be selling any stock in decades, if then.”

Buffett also shared context behind the original decision. “They were selling at ridiculously low prices,” he said, underscoring the traditional value framework that guided his entry — a strategy rooted in identifying durable businesses trading below intrinsic worth.

A Strategic Shift with Deep Roots

Buffett’s embrace of Japan’s trading houses is more than opportunistic. The “sogo shosha” are sprawling conglomerates, with interests in sectors ranging from energy and logistics to food and infrastructure. They mirror Berkshire itself in both breadth and structure — diversified, conservative, and built for resilience.

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That alignment appears to be a key reason Buffett is now considering taking the relationship even further. He hinted at potential joint investments with the trading houses, saying, “That will be an expanding relationship.” The logic is straightforward: certain large-scale deals may be more feasible through collaboration, and these firms offer both scale and local insight.

A Long-Term View Amid Global Divergence

Buffett’s comments came in response to a question about Japan’s monetary policy — specifically, whether the country should be raising interest rates while others are easing. Rather than weighing in on central bank decisions, Buffett focused on fundamentals. His answer pointed to the long-standing trust and opportunity he sees in the companies themselves, rather than macro positioning.

The context is important. While the Federal Reserve and European Central Bank have signaled potential rate cuts in response to slowing inflation, Japan has remained an outlier, slowly emerging from decades of ultra-low rates. Yet even as monetary trends diverge globally, Buffett’s stance remains fixed: he is not chasing macro trades; he is investing in enduring businesses.

Then vs. Now: The Currency Risk That Once Stopped Him

Buffett’s historical hesitation around Japan wasn’t about skepticism of the country itself, but about returns and risk. In the late 1990s, Japan’s post-bubble malaise made it difficult to find businesses generating attractive equity returns. 

Buffett also cited currency exposure as a concern — a hurdle he appears to have since addressed by issuing yen-denominated debt to finance his positions. That move has allowed Berkshire to benefit from Japan’s still-low interest rates while sidestepping the forex speculation he once avoided.

Why Japan Still Fits the Buffett Mold

The Japan bet may seem like a departure, but it’s fundamentally consistent with Buffett’s value investing approach. He bought into strong companies at a discount. The dividend yields are healthy. The management is disciplined. And now, the relationships are deepening.

Berkshire’s cost basis in the five firms is estimated around $13.8 billion; the positions are now worth over $23 billion. That upside — driven by patient capital and sound underwriting — is classic Buffett.

His declaration that “we won’t give a thought to selling” further signals that this is no short-term play. It’s the kind of commitment that underlines Buffett’s core philosophy: find good businesses, buy them at good prices, and hold them for as long as they remain good businesses.