So Warren Buffett walked into a Florida classroom back in 1998 and basically said Japan wasn't worth his time. He laid out the math pretty clearly—BOJ was lending at 1%, so all he had to do was find companies earning more than that. Problem was, he couldn't find them. Japanese firms were posting terrible returns on equity, and he wasn't interested in playing currency games with the yen. That was the Lost Decade talking. Fast forward to 2026, and the man's completely flipped the script. Berkshire is now sitting on nearly $23.5 billion in positions across five Japanese trading houses—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. We're talking close to 10% ownership in each, which honestly is wild for a foreign investor to pull off in Japan.

What changed his mind? Well, Warren started quietly buying into these firms back in 2019, but nobody really paid attention until his 90th birthday when he announced it publicly. The thing that clicked for him was recognizing these trading companies as diversified machines—they touch energy, shipping, retail, food, everything. They're basically mini-Berkshires operating out of Tokyo. He got permission to exceed Japan's usual 10% foreign ownership cap, something almost never granted. The math on the investment is pretty clean too. He borrowed cheap yen-denominated debt when rates were rock bottom, then deployed that capital into companies throwing off solid dividends and cash flow. By the end of last year, his initial $13.8 billion had ballooned to $23.5 billion. That's nearly $10 billion in unrealized gains just sitting there.

But here's where it gets interesting. The BOJ landscape is shifting beneath his feet. Inflation expectations just hit their highest level since June 2024—86.7% of Japanese households now expect prices to rise over the next year. Wages are finally climbing, companies are raising prices, and the central bank's been signaling rate hikes could be coming. That's the opposite environment from the 1% lending rates that made this trade possible in the first place. Currency risk is still lurking too. The yen carry trade has blown up before when rates spike unexpectedly. But Warren's not walking away this time. He's holding firm on Tokyo, collecting dividends off debt that cost almost nothing. The same calculation he rejected in 1998 is now printing money in 2026.