TOKYO – Shares in Japan's five major trading houses surged in early trading on Tuesday after Warren Buffett revealed his conglomerate, Berkshire Hathaway, plans to increase its ownership in them. Mitsubishi Corp led the rally, climbing 7.5%, followed by Mitsui & Co, Sumitomo Corp, Itochu, and Marubeni, each posting gains exceeding 5%.

Buffett's announcement came in his annual letter to Berkshire shareholders, released over the weekend. He stated that the five trading houses have agreed to "moderately relax" the previous restrictions that limited Berkshire's ownership to below 10%. "Over time, you will likely see Berkshire’s ownership of all five increase somewhat," Buffett wrote.

The surge in share prices occurred despite a 1.57% dip in Tokyo's benchmark Nikkei share average. Markets were closed on Monday for a public holiday.

These trading houses, known as "sogo shosha," are involved in a wide range of activities, from trading various materials, products, and food – often acting as intermediaries – to providing logistical support. They also have significant investments in the real economy, spanning sectors like commodities, shipping, and steel.

Berkshire's investment in these companies, which began in 2019, reached $23.5 billion by the end of 2024. Buffett's letter detailed that Berkshire has invested $13.8 billion in its current holdings and anticipates receiving $812 million in dividend income in 2025.