Warren Buffett’s Berkshire Hathaway Inc sold a ¥281.8 billion (US$1.89 billion or RM8.11 billion) multi-tranche bond on Thursday in a deal that’s fuelling speculation the legendary investor will increase his exposure to Japanese assets.

The firm priced a seven-part bond deal with tenors spanning three to 30 years in Berkshire’s biggest yen-denominated deal since its debut sale in 2019. All maturities except the three-year tranche offered higher premiums relative to its corresponding yen-note offering in April. 

The billionaire’s fundraising in Japan is being closely watched by equity-market investors because Buffett has used yen funds raised in the bond market to purchase holdings in Japanese companies. His stake increases in five major trading houses helped drive up the Nikkei 225 Stock Average to a record high earlier this year. Should Berkshire’s investment choices widen to other stocks such as banks, insurers and shippers, as some analysts speculate, that may lead to more gains for the Japanese market.

The deal was a key test of investor demand for yen-denominated bonds given a shift in Bank of Japan (BOJ) policy this year away from ultra-easy rates. The wider premiums on Berkshire’s longer-tenor debt reflected investors’ caution about the outlook for interest rates. 

The 10-year part offered a spread of 82 basis points over mid swaps compared with 71 basis points in April, while a 20-year note carried a premium of 91 basis points versus 78 basis points.

The BOJ is widely expected to hold its settings steady when it next sets policy on Oct 31, and some economists pushed back their forecasts for a year-end hike after new Prime Minister Shigeru Ishiba said last week that conditions are inappropriate for such action.

  - Bloomberg