① Berkshire Hathaway decided on the amount of Japanese yen bonds to be issued, raising a total of 263.3 billion yen, or about 1.71 billion US dollars; ② This is the second-largest transaction in Berkshire's history of issuing yen bonds eight times, after the 430 billion yen bond issue for the first time in 2019.
Financial Services Association, April 18 (Editor Zhao Hao) On Thursday (April 18) local time, Berkshire Hathaway, a company owned by “stock god” Warren Buffett, decided to issue Japanese yen bonds, raising a total of 263.3 billion yen (about 1.71 billion US dollars).
Looking vertically, this is the second-largest transaction among the eight Japanese yen bonds issued by Berkshire in history, after the first issuance of 430 billion yen bonds in 2019, triggering speculation that it may further increase its holdings of Japanese stocks. A few months ago, the Nikkei 225 Index broke its 1989 record high with the support of “stock gods.”
Asset Management One Co. Fund Manager Haruyasu Kato said the scale of the deal was “astonishing.” Takehiko Masuzawa, head of stock trading at Phillip Securities Japan Ltd., believes this is good news for the Japanese stock market, which has been weak recently, and may be a buying signal for Japanese stocks.
According to media analysis, this will be a key test of interest in Japanese yen bonds. Recently, market concerns that the Bank of Japan may raise interest rates again soon have eased. Last month, the Bank of Japan officially withdrew from its negative interest rate policy, but the central bank's short-term interest rate is still near historic lows.
Specifically, Berkshire has issued a total of 7 types of bonds with a term of 3 years, 5 years, 7 years, 10 years, 20 years, and 30 years, respectively. Among them, the 3-year period was the largest, reaching 169 billion yen, and the coupon interest rate was 0.974%. The second largest was the 7-year period, with a scale of 35.3 billion yen.
Fund manager Kato pointed out that Berkshire offered a coupon interest rate of close to 1% on this 3-year Japanese yen bond, which is significantly higher than similar bonds sold by other Japanese companies. Excluding this one, Berkshire Hathaway has issued 7 yen bonds since 2019, and is one of the largest overseas issuers of Japanese yen bonds.
In February of this year, Berkshire mentioned in its annual shareholder letter that the company provided most of the capital for investing in Japanese companies by issuing Japanese yen bonds. Buffett also expressed a positive review of the five major trading companies in the letter: “The possibility of cooperating with well-managed and reputable companies and finding investment opportunities around the world is also a benefit.”
Berkshire also said that he hopes to eventually own 9.9% of Itochu, Marubeni, Mitsubishi Corporation, Mitsui & Co., and Sumitomo Corporation. Analyst Masuzawa said that Buffett may be supplementing ammunition to buy more Japanese stocks. If subsequent position reports reflect this fact, it may bring a new wave of boost to Japanese stocks.
By the close of the Japanese stock market on Thursday, four of the top five trading companies had recorded gains, with Marubeni and Mitsui Bussan rising more than 1%. Berkshire Class B shares, which are currently trading in US stocks, rose nearly 0.5%.