Warren Buffett sees long-term potential in Japanese companies

U.S. company Berkshire Hathaway Inc. intends to gradually increase its stake in Japan's five largest department stores, Warren Buffett said in his annual report to shareholders. The announcement could support the share prices of these companies on the Tokyo Stock Exchange.

Initially, Berkshire Hathaway $BRK-B committed not to exceed the 10% stake in these companies. However, as the company gradually reaches this limit, Japanese trading houses have agreed to increase it "slightly". Buffett's interest in these companies stems from their strong financial position, stable dividend policy and prudent capital management, factors that investors appreciate.

Long-term growth and recent fluctuations

Such companies include Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp. Even so, their stocks have had a tough time in recent months, similar to the entire Japanese stock market. The Tokyo Stock Exchange has lagged behind global bourses, partly because of the strengthening yen…