Greg Abel states that rising bond yields in Japan are not posing a fundamental challenge for major trading houses.

Greg Abel, the CEO of Berkshire Hathaway, stated that rising bond yields in Japan are not currently posing a fundamental challenge for the country's major trading houses. During a visit to Tokyo, Abel noted that while Japan's 10-year bond yield reached a 30-year high this week, the yields remain relatively low compared to other global bond yields.

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Berkshire Hathaway holds a stake greater than 10% in five of Japan's largest trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. These firms deal in various sectors including energy and consumer goods. Abel indicated that the company expects to continue raising debt in yen as appropriate despite the higher yields. The initial investments in these trading houses were made under a guarantee that Berkshire would not take double-digit stakes. However, Abel stated that the company received permission from each firm to own more than 10% in each after six years. Abel noted that these investments are long-term holdings intended to last for many decades, and the company continues to see value in them as shares have grown substantially since the initial investment.

Sources

• CNBC
  Berkshire CEO Greg Abel says Japanese bond yields not a challenge for trading houses right now

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Paywall and unreadable sources

• Bloomberg.com
  Berkshire’s Abel Vows Long-Term Support for Japan Trading Houses
• Barron's
  Berkshire CEO Abel to Make Rare TV Appearance. What He Might Talk About.
• WSJ
  Berkshire’s Abel Says Borrowing Costs in Japan Are Still ‘Relatively Modest’
• dars.gov.et
  Itochu Chief Says Japan's Diversified Trading Houses 'Suited' for Uncertain Times - Non-GAAP Earnings