How do the Japanese government and business community view Warren Buffett's investments? Is it welcome, cautious, or both?

Perspectives of the Japanese Government and Business Community on Buffett's Investment

The attitude of the Japanese government and business community toward Warren Buffett’s investments in Japan’s five major trading houses (Mitsubishi Corporation, Mitsui & Co., Itochu Corporation, Marubeni, and Sumitomo Corporation) through Berkshire Hathaway can be summarized as both welcoming and cautious. On one hand, they appreciate the positive impacts; on the other, they maintain a degree of vigilance. The analysis below examines this from multiple angles:

1. Welcoming Stance

Government Level: The Japanese government views Buffett’s investment as a vote of confidence in Japan’s economy. Since 2020, Buffett’s increased stakes in the five trading houses (holding approximately 8–9% of shares) have been seen as a positive signal for foreign capital inflows. This aligns with Prime Minister Fumio Kishida’s "New Capitalism" policy, which emphasizes attracting foreign investment and improving corporate governance. The government believes this will enhance the appeal of Japanese equities and advance reforms at the Tokyo Stock Exchange (e.g., requiring companies with price-to-book ratios below 1 to improve).
Business Community Level: Executives of the five trading houses have publicly welcomed the investment. Following Buffett’s involvement, share prices surged (e.g., Mitsubishi Corporation’s stock doubled), boosting corporate value. The firms regard Buffett as a "friendly investor," noting his long-term holding style aligns with Japanese corporate culture. Some companies have even adjusted strategies—such as increasing dividends and share buybacks—to meet Buffett’s expectations.
Broader Impact: This is seen as international recognition of Japan, particularly amid yen depreciation and global uncertainty, helping attract more foreign investment.

2. Cautious Stance

Government Level: Despite welcoming the investment, the government remains wary of large-scale foreign ownership in domestic firms. Historically, Japan has restricted foreign investment in sensitive sectors (e.g., defense, technology). While Buffett’s stakes do not cross red lines, authorities worry foreign capital could push for aggressive reforms, disrupting Japan’s unique "cross-shareholding" system and long-term corporate culture. In 2023, Japan strengthened its foreign investment screening mechanism to mitigate potential national security risks.
Business Community Level: Some executives and analysts are cautious that Buffett may pressure firms for higher returns or governance changes. Japanese companies traditionally prioritize stability over short-term profits and fear foreign investors might promote a "shareholder primacy" model, leading to layoffs or restructuring. Though no public conflicts have arisen with the five trading houses, reports suggest internal discussions on managing potential "shareholder activism."
Potential Risks: Further increases or sales of Buffett’s holdings could trigger market volatility. Japanese media (e.g., Nikkei) occasionally express concerns that foreign dominance might weaken local control.

3. Overall Assessment

Dual Attitude Explained: The welcoming stance stems from economic benefits (e.g., capital inflow, global credibility), while caution arises from cultural and strategic differences. Japan is in a transitional phase (e.g., promoting sustainable investment and ESG), where Buffett’s involvement acts as a catalyst—yet requires balancing domestic interests.
Recent Developments: As of 2023, Buffett received a warm welcome during his visit to Japan, where he expressed long-term optimism about the country, easing some concerns. However, if global economic volatility intensifies, Japan’s stance may become more guarded.

In summary, the Japanese government and business community lean toward a positive response but will manage risks through policy and dialogue to ensure investments align with national interests.