MW Takaichi's victory in Japanese election means a billion dollar payday for Berkshire Hathaway

By Jules Rimmer

Warren Buffett's investment in Japan are paying off big-time

Japanese stocks responded positively to Takaichi's victory.

The landslide win for Japan's ruling, right-wing coalition in Sunday's elections will be welcomed by Berkshire Hathaway shareholders.

Retired chief executive Warren Buffett made a string of big bets on Japanese stocks starting in 2019, and Monday's near-4% rally in Tokyo boosted the share prices, and the value of Berkshire Hathaway's $(BRK.A)$ $(BRK.B)$ holdings above $40 billion.

Buffett spent about $6.5 billion to buy 5% stakes in five major Japanese trading houses - or soga shosha as they are known locally: Mitsubishi (JP:8058), Sumitomo (JP:8053), Marubeni (JP:8002), Itochu (JP:8001) and Mitsui (JP:8031). Over the next few years, Berkshire Hathaway (BRK.B) increased those stakes, taking its total outlay to about$13.8 billion by 2023, and with the strong performance of the Japanese market since then, the portfolio is now worth about $40 billion, a gain of roughly $26 billion.

Prospects for Japanese shares after the election result look promising, according to Wall Street analysts. Citigroup on Monday forecast upside to 57,000 on the Nikkei 225 JP:NIK and 3,800 on the TOPIX JP:TPX. Goldman Sachs pointed to strong earnings momentum and the potential catalyst of a summit on March 19 between President Trump and new Prime Minister Sanae Takaichi.

Goldman Sachs' Japan research team, led by Bruce Kirk, said foreigners and retail investors have been buyers of the market recently, with their enthusiasm heightened by the strong reporting season, during which 51% of companies have beaten expectations.

The Nikkei 225 index surged 3.89% to a record high in Monday trading, and the yen (USDJPY) firmed slightly against the dollar to -Yen156.66. Investors will be following the yen closely owing to its importance to the carry trade, by which traders borrow in yen to fund long positions in higher-risk assets. IShares Japan EWJ, the most liquid Japanese exchange-traded fund listed in the U.S., rose 1% in premarket trading, and is up roughly 10% so far in 2026.

The yen is in focus because rising inflation, and negative real interest rates - whereby the interest rate set by the Bank of Japan is lower than the rate of inflation - have led to it being seriously undervalued according to many observers. The weakness has been a major bone of contention in trade relations with the U.S. Since Liberation Day last year, the U.S. Treasury has been pressuring the Bank of Japan to hike interest rates and strengthen the yen, boosting the competitiveness of American exports.

Takaichi's Liberal Democratic Party won 316 out of 465 seats while its coalition partner, the Japan Innovation Party, secured another 36 seats, ensuring a super majority for Japan's first female prime minister. Citi strategist Ryota Sakagami said the outcome will reinforce the so-called 'Takaichi Trade,' backing fiscal expansion, deregulation and increased government spending. That will likely keep the Japanese yen broadly weaker.

Berkshire Hathaway's investment in Japan is a carry-trade in itself. Buffett borrowed money in yen at around 1% to fund the purchases in his stocks, which offer dividend yields of around 4%. The five sogo shosha in which he invested are well-diversified conglomerates operating in a range of industries including energy, metals and food. Their revenue streams tend to generate lots of dollar income, boosting their performance during a period when the yen has been in constant decline.

-Jules Rimmer

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February 09, 2026 06:31 ET (11:31 GMT)

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