Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., in Fukushima prefecture, Japan, Monday, Nov. 21, 2011.
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Berkshire HathawayWarren Buffett is in Japan and recently revealed that he has increased his stakes in the country’s biggest trading houses, saying he was “baffled” by whether to buy them two years ago.
The five companies – Mitsubishi Corp., Mitsui & Co., Itochu Corp, Marubeni Corp., Sumitomo Corp. posted two straight days of gains as Buffett confirmed he had added about another percentage point to his holdings. Berkshire Hathaway’s stake in the five trading houses is now 7.4%.
Shares continued to trade mostly higher for a third day on Thursday, wiping out earlier losses after Federal Reserve minutes showed expectations of a recession in the United States following the banking crisis. regional. Sumitomo shares fell 0.5%.
Buffett’s trip is a “nod of approval” – especially for domestic investors in Japan, according to Monex Group’s Jesper Koll.
“For Japanese institutional investors, now is really the stamp of approval that Japan can deliver superior returns,” Koll told CNBC’s “Street Signs Asia.”
He pointed to Buffett’s trip as having the potential to boost Japanese investor confidence as the country continues to struggle with weak consumption.
“The real goal is Japanese investor confidence, and that’s where Warren Buffett’s visit was very, very important,” Koll said. “He has a global track record, but now he has a very positive track record when it comes to investing in Japan.”
Household spending in Japan rose slightly by 1.6% in February, according to the latest government data.
It also marked the first growth in consumption the economy has seen in the fourth months, with spending outside seasonal factors led by recreation, leisure and travel.
Private consumption is a key indicator for Japan, accounting for more than half of the country’s gross domestic product.
Monex’s Koll added that Buffett will benefit from the trading house advantage.
Trading companies, also called sogo shosha, are conglomerates that import everything from energy and metals to food and textiles to Japan. They also provide services to manufacturers. Trading houses have contributed to the growth of the Japanese economy and contributed to the globalization of its activities.
“Any new business, any new business being created, Japanese trading houses will have superior intelligence and superior access to the deal, and that’s something Berkshire Hathaway will be able to leverage in a single antenna. towards the future vision of Japan as well as the Asia-Pacific,” Koll said.
Earlier this week, the new Governor of the Bank of Japan, Kazuo Ueda, reiterated his intention to maintain the central bank’s accommodative monetary policy, which provides additional support for the Japanese stock market and retail investors.
Ueda stressed that the central bank’s yield curve control and negative interest rate policies will likely continue until the economy hits its 2% inflation target.