By Kosaku Narioka

Japanese trading-house stocks rose sharply after Warren Buffett said Berkshire Hathaway's stakes in them would likely increase somewhat over time.

Mitsubishi Corp. shares were recently 8.7% higher Tuesday morning, Marubeni Corp. was up 7.9% and Itochu Corp. was 6.5% higher. Meanwhile, Sumitomo Corp. was up 5.9% and Mitsui & Co. was 4.3% higher. Japanese markets were closed Monday for a national holiday.

Buffett told shareholders in his annual letter Saturday that Berkshire received the Japanese companies' blessing to increase its stake beyond 9.9%.

A year ago, the legendary investor said that Berkshire owned about 9% of each of the five companies and that it had told each company it wouldn't increase its stake beyond 9.9%.

"As we approached this limit, the five companies agreed to moderately relax the ceiling," he said in the letter. He said that Berkshire's shareholders would likely see its ownership of all five Japanese companies increase somewhat over time.

Berkshire began buying shares of the five Japanese trading companies in July 2019. He praised the companies for their use of capital, their management and their attitude toward shareholders.

The Japanese trading houses own or help run a number of businesses in Japan and abroad.

Last week, Mitsui said it would acquire a 40% interest in the Rhodes Ridge iron ore project in Australia, to be operated by Rio Tinto, for $5.34 billion, as part of efforts to secure a stable supply of key resources for Asian economies, including Japan.

Earlier this month, Itochu said it was considering investing in the owner of 7-Eleven amidst an international takeover battle over one of the world's biggest convenience-store operators.

Buffett wrote in Saturday's annual letter that Berkshire would never prefer cash over "good businesses." An exception to Berkshire's focus on U.S. investments is its growing investment in Japan, he said.

At the end of 2024, the market value of Berkshire's Japan holdings had reached $23.5 billion, the legendary investor wrote.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

February 24, 2025 21:38 ET (02:38 GMT)

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