Caixin News Agency, October 1st: According to media reports on Tuesday; quot; Stock God& quot; Warren Buffett's Berkshire Hathaway is planning to issue yen bonds for the second time this year.
This news has sparked market speculation that Berkshire Hathaway is seeking to increase its investment in the Japanese stock market.
According to reports, Berkshire Hathaway has hired Bank of America Securities and Mizuho Securities to issue senior unsecured bonds denominated in Japanese yen.
Since 2019, Berkshire Hathaway has been regularly issuing yen bonds, with the last issuance in April. At that time, Berkshire Hathaway raised a total of 263.3 billion yen (approximately 1.71 billion US dollars) through the issuance of yen bonds, making it the second largest transaction in the company's history of eight yen bond issuances, after the first issuance of 430 billion yen in 2019.
Japanese stocks are expected to receive further support
Berkshire Hathaway's fundraising plan has been closely monitored by stock market investors, as the company's purchase of shares in Japan's top five trading companies earlier this year helped push the Nikkei 225 index to a historic high.
In February of this year, Berkshire Hathaway mentioned in its annual shareholder letter that the company provided the majority of funds for investing in Japanese companies through the issuance of yen bonds.
There is still a lot of room for Berkshire Hathaway to increase its holdings in trading companies, "said Takehiko Masuzawa, head of Japan stock trading at Phillip Securities.
He pointed out that for the entire Japanese stock market, "this is good news for those who want to buy, and it will give them the necessary impetus
In August 2020, Berkshire Hathaway announced for the first time that it had acquired a 5% stake in the five major Japanese trading companies (Itochu, Marubeni, Mitsubishi Corporation, Mitsui&Co., and Sumitomo Corporation). Since then, the company has increased its holdings in the five major trading companies several times. In February of this year, Buffett revealed that Berkshire Hathaway already holds approximately 9% of the shares in the five major trading companies. Berkshire Hathaway has stated that it hopes to eventually own 9.9% of each of the five major trading companies.
Affected by the above news, Japanese trading company stocks rose on Tuesday, with the index tracking the sector increasing by as much as 2.8%. Itochu Corporation's stock price rose by 3.8% at one point, while Mitsui&Co.'s stock price rose by 4.2% at another point.
At the same time, the Japanese stock market also received a boost, with the Nikkei 225 index closing up 1.93% at 38651.97 points as of the close; The Japan Eastern Stock Exchange index rose 1.69% to 2690.78 points.
It is worth noting that after Shigeru Ishiba won the leadership of the Liberal Democratic Party in Japan, the Japanese stock market has been under pressure in recent days, with the Nikkei 225 index closing down 4.8% on Monday. Due to Shigeru Ishiba's support for the Bank of Japan's gradual move away from ultra-low interest rate policies, the market is once again betting on the possibility of the Bank of Japan raising interest rates.
However, the minutes of the September monetary policy meeting released by the Bank of Japan on Tuesday morning showed that the bank remains cautious about raising interest rates.
Against the backdrop of the global trend of interest rate cuts, the normal path of interest rates by the Bank of Japan has attracted much attention. The unexpected interest rate hike by the Bank of Japan at the end of July triggered a large-scale liquidation of the global yen arbitrage trading market, leading to a "Black Monday" for global stock markets in early August.