Berkshire Hathaway's New CEO Signals Confidence in Japanese Trading Houses Amid Market Uncertainty

Greg Abel, who succeeded Warren Buffett as CEO of Berkshire Hathaway at the beginning of 2026, has publicly endorsed the company's investments in Japan's top trading houses, sending mixed signals to the Tokyo Stock Exchange on Monday. The endorsement came through an annual letter to shareholders released Saturday, where Abel highlighted Berkshire's continued confidence in these unique Japanese conglomerates despite mounting pressure from President Trump's destabilizing trade policies.

Japan's trading houses—Mitsubishi, Mitsui, Itochui, Marubeni, and Sumitomo—operate as massive trading conglomerates that span multiple industries from natural resources to retail. These companies have enjoyed a special relationship with Berkshire Hathaway since 2020, when Buffett first invested in all five, marking one of his most significant forays into Japanese markets.

Abel's comments come at a particularly sensitive time for these businesses. Trump's tariff policies have created significant uncertainty for Japanese exporters and trading companies that rely heavily on international commerce. The "tariff tracker" maintained by Nikkei Asia shows that US levies continue to affect Asian markets, putting pressure on companies that depend on smooth cross-border trade.

The trading houses have been adapting to these challenges by pivoting toward natural resources and betting on the AI boom. As reported in Nikkei's coverage of business trends, these companies are increasingly focusing on commodities and energy sectors as they navigate the volatile trade environment. This strategic shift appears to align with Berkshire's traditional investment philosophy of backing companies with strong fundamentals and durable competitive advantages.

Market reaction to Abel's endorsement was mixed, reflecting the complex dynamics at play. While some investors interpreted the comments as a strong vote of confidence from Berkshire's leadership, others remained cautious given the ongoing trade tensions and economic uncertainty. The shares of Japan's top five trading houses showed varied performance on the Tokyo Stock Exchange, suggesting that investors are weighing multiple factors beyond just Berkshire's endorsement.

This development also highlights the evolving relationship between Berkshire Hathaway and its Japanese investments. Under Buffett's leadership, these investments were seen as a bet on Japan's economic recovery and the unique business model of trading houses. Now, with Abel at the helm, the continued commitment suggests that Berkshire sees long-term value in these conglomerates despite short-term headwinds.

The timing is particularly noteworthy given other recent developments in Berkshire's Japanese portfolio. Sumitomo, one of the trading houses backed by Berkshire, has been trying to shed its "deal-shy" reputation with recent acquisitions. This aggressive stance from one of its portfolio companies may reflect the confidence that Berkshire's backing provides.

For the broader market, Abel's comments serve as a barometer of how traditional value investors are approaching Japanese equities in an era of heightened trade tensions. The trading houses represent a unique investment opportunity—they're not pure exporters, nor are they purely domestic companies, which may make them more resilient to trade disputes than other Japanese businesses.

As the situation develops, investors will be watching closely to see whether Abel's endorsement translates into increased investment from Berkshire or if it simply represents a vote of confidence in the current portfolio. The mixed market reaction suggests that while Berkshire's backing remains valuable, it may not be enough to overcome the fundamental uncertainties created by the current trade environment.

What's clear is that Abel is maintaining Berkshire's strategic approach to Japanese investments while potentially adding his own perspective on navigating the complex global trade landscape. Whether this approach will pay off remains to be seen, but for now, Berkshire's continued commitment to Japan's trading houses signals that at least one major investor sees long-term value in these unique conglomerates despite the current challenges.