東京証券取引所（東京都中央区）by Kakidai | CC BY-SA 4.0 | commons.wikimedia.org
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Shares of Japan’s five largest trading houses surged 4–9% after Warren Buffett released his annual letter.

As the FT notes, Buffett stated that Berkshire intends to further increase its already substantial stake in these companies and hold them “for many decades.”

What the article does not highlight, however, is the financing strategy behind this investment.

👉 “We like the current math of our yen-balanced strategy. As I write this, the annual dividend income expected from the Japanese investments in 2025 will total about $812 million, and the interest cost of our yen-denominated debt will be about $135 million.” (Annual letter, p. 11)

By borrowing in yen at ultra-low rates to invest in high-dividend Japanese assets (while keeping their vast U.S. cash reserves in Treasury bills yielding 3–4%), Berkshire has structured a capital-efficient position—one that most investors cannot easily replicate.

For retail investors in USD or EUR, holding these positions long enough may still provide a solid return, as Buffett’s letter suggests. However, they would need to convert upfront to JPY and hold, missing out on both the leverage effect and the additional yield from U.S. Treasuries. Berkshire, on the other hand, optimizes its capital structure to maximize returns.