Warren Buffett (Trades, Portfolio) is making another big bet on Japan. Berkshire Hathaway (BRK.A, Financial)) just increased its stakes in the country's five biggest trading houses, reinforcing Buffett's confidence in these industrial powerhouses. Regulatory filings show Berkshire now holds 9.82% of Mitsui & Co, 9.67% of Mitsubishi Corp, 9.29% of Sumitomo Corp, 8.53% of Itochu, and 9.30% of Marubeni. The move wasn't a surprise—Buffett hinted at this in his annual letter, and the firms have since agreed to ease the 10% cap on his ownership. These companies, deeply embedded in global supply chains, logistics, and raw materials, fit Buffett's playbook: strong cash flows, diversified revenue streams, and market dominance.

The big question: will this push Japanese stocks higher? Buffett's earlier investments in 2020 and 2023 sent waves through the Nikkei, but this time, the broader market backdrop looks tougher. The Nikkei 225 has slipped over 6% this year, while global investors wrestle with uncertainty from trade tariffs to economic slowdowns. Still, Berkshire's steady accumulation signals that Buffett sees long-term value, and that alone could encourage more investors to take a closer look. Market watchers say the presence of one of the world's most legendary investors offers reassurance, even as Japan's market environment faces headwinds.

There's also Berkshire's $1.9 billion yen bond sale last October—now looking like a setup for this latest round of buying. Mitsubishi and Itochu have welcomed Buffett's growing stake, viewing it as a signal of long-term confidence. The big unknown? How much further he'll go. Buffett has already said he plans to keep inching up his ownership, and given his track record, he doesn't make moves like this lightly. If history is any guide, this story isn't over yet.