Berkshire Sees Japan’s 3% Bond Yield as Manageable for 5 Trading Houses

Q: At what exact interest rate threshold will Japan's rising bond yields finally force Berkshire to abandon its lucrative yen-borrowing strategy?

There is no disclosed exact rate threshold at which Berkshire Hathaway would stop borrowing in yen. Greg Abel’s comments indicate the opposite: even with Japan’s 10-year government bond yield at just above 3%, a 30-year high, Berkshire does not view current yields as a fundamental problem for either its Japanese trading-house stakes or its yen funding strategy. He said none of the five trading houses identified the rise as a serious challenge, and he stressed that Japanese yields are still low relative to many global markets. The available evidence suggests Berkshire’s decision is not tied to a single headline yield level anyway. It depends more on whether yen borrowing still makes economic sense relative to the returns from the assets it owns. Berkshire’s Japanese positions have generated large unrealized gains and substantial dividend income, and the company has continued to add to some holdings above 10%. It has also kept issuing yen debt in 2026, including notes priced from roughly 2.1% to just above 4% depending on maturity, showing it is still comfortable accessing that market. In practice, Berkshire would likely rethink the strategy only if the spread between its yen funding costs and the long-term cash returns and value of its Japanese investments narrowed materially, or if market conditions became unstable. But neither Abel nor Berkshire has provided a specific trigger rate, so any exact threshold would be speculation.

2 articles · Updated · CNBC · Sep 2

Greg Abel said Japan’s 10-year yield above 3% has not become a fundamental problem for the five trading houses in which Berkshire holds stakes above 10%.
Abel said none of the companies flagged higher borrowing costs as a major challenge, arguing Japanese yields remain modest relative to global markets, with the U.S. 10-year Treasury recently topping 4.8%.
Berkshire still expects to issue yen debt when appropriate, even as yields hit a 30-year high, and Abel said the group continues to find value in the Japanese investments.
Six years after Berkshire’s initial purchases, each trading house has allowed it to exceed the original 10% ownership cap, reinforcing Abel’s view of the stakes as decades-long holdings and a base for broader dealmaking in Japan and abroad.