According to people familiar with the matter, Buffett's Berkshire Hathaway plans to sell Japanese yen bonds in the global market, triggering speculation that the billionaire is considering investing more in Japan.
A source familiar with the matter revealed that Berkshire has commissioned the bank to work on a potential standard SEC-registered bond issuance. Depending on market conditions, this deal may take place in the near future.
As a result, Berkshire will become the first large-scale non-financial overseas bond issuer to start trading yen since the Bank of Japan abolished the world's last negative interest rate policy last month.
Interest spreads on yen-denominated bonds issued in Japan and overseas have narrowed to their lowest level since September 2022, and there are signs that Bank of Japan Governor Kazuo Ueda will not rush to raise interest rates again. Investors are seeking an additional yield of about 52 basis points for corporate bonds, down from 67 basis points a year ago.
The last time Berkshire used the yen bond market was in November of last year, when it issued five batches of 122 billion yen bonds. The company is a regular issuer of yen-denominated bonds, usually in April.
Kazuma Ogino, senior credit analyst at Nomura Securities, said, “Berkshire has issued a large number of bonds in the past, exceeding 100 billion yen, which shows that it has successfully attracted a wide range of investors.”
Buffett said in his annual letter to investors at the end of February that Japanese trading companies pursue investor-friendly policies, which raised speculations that he might increase his holdings in these companies. The letter said that most of Berkshire Hathaway's current investments in Japan are funded through Japanese yen bonds.