5 Japan stocks rally on Berkshire's blessing, despite a broader trading slump in Asia

• Warren Buffett’s endorsement boosted the stocks of five Japanese trading houses.
• Buffett wrote in Berkshire’s annual letter that the company plans to increase investment in the five companies.
• However, Asian shares were broadly lower on Tuesday due to US President Donald Trump’s tariff threats.

Legendary investor Warren Buffett’s magic helped a group of Japanese stocks weather a broad market decline on Tuesday.

Shares of five Japanese trading houses were on a tear after Buffett wrote in Berkshire Hathaway’s annual shareholder letter on Saturday that it would increase its investment in the companies.

Berkshire first started buying shares in five Japanese trading house giants — Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo — in July 2019.

On Tuesday, the shares in the trading houses closed up 6.7%, 7.5%, 8.8%, 4.7%, and 6.6% respectively. They are all lower over the past year.

The five Japanese trading houses “very successfully operate in a manner somewhat similar to Berkshire itself,” Buffett wrote in the shareholder letter.

“As the years have passed, our admiration for these companies has consistently grown,” wrote Buffett, praising the firms’ use of capital, management, and attitude toward investors.

He wrote that Berkshire is likely to increase its ownership of all five firms.

“Each of the five companies increase dividends when appropriate, they repurchase their shares when it is sensible to do so, and their top managers are far less aggressive in their compensation programs than their US counterparts,” Buffett wrote, affirming Berkshire’s “very long term” commitment for the trading houses that he expects to span decades.

Despite the pop in Japanese trading houses’ stock on Berkshire’s optimism, the Japanese yen and other concerns could weigh on the stocks. Macroeconomic risks also stem from Trump’s tariff threats and federal job cuts, wrote Travis Lundy, a Japan markets analyst.

“This does not bode particularly well for trading houses which make their money off increases in global consumption and investment demand, and higher not lower international trade,” wrote analyst Travis Lundy of Quiddity Advisors, who publishes on Smartkarma, on Monday.

Chinese tech shares pressured by Trump jitters

In contrast to the stock rally in Japanese trading houses, China’s tech stock investors were pulled back to earth on Tuesday by US President Donald Trump’s comments reaffirming his commitment to tariffs on trading partners.

Trump said on Monday that tariffs against Canada and Mexico next month were “on time” and “moving along very rapidly.” He said “reciprocal tariffs” on other trading partners were on schedule to kick off in April. Over the weekend, the American president also ordered new restrictions on Chinese inbound investment to the US.

In Hong Kong, recent star tech stock Alibaba closed 3.8% lower after bumper gains recently. The stock is still about 60% higher this year.

Most major Chinese tech stocks similarly posted losses: Tencent closed 2.5% down, Meituan ended 4.8% lower, and Baidu lost nearly 4%.

Hong Kong’s Hang Seng Tech Index closed 1.6% lower.

The losses in Chinese tech contrasted with the upbeat recent sentiment for their shares following the rise of DeepSeek, which ignited enthusiasm about the potential of AI technology from the likes of Alibaba and Tencent.

Beyond profit-taking, Tuesday’s tech stock declines also highlighted how Chinese shares are still trading under the broad shadow of geopolitical risks.

Hong Kong-listed Chinese shares, or H shares, are more vulnerable to market sensitivities than their mainland-listed counterparts, wrote Goldman Sachs analysts in a Sunday note.

“Potential risks around US tariff policies and US-China relations could put more pressure on H shares due to their higher US ownership,” the analysts wrote.

Trump’s comments pulled the market broadly lower in Asia.

Japan’s Nikkei 225 closed 1.4% lower, South Korea’s Kospi ended down 0.6%, and Australia’s ASX 200 lost 0.7%.

China’s CSI300 index closed 1.1% lower while Hong Kong’s Hang Seng Index ended 1.3% lower.