Berkshire’s yen bond deal is its smallest ever amid trade war

Berkshire Hathaway Inc. sold ¥90 billion ($628 million) of bonds on Friday in its smallest yen deal ever amid market turmoil sparked by an escalating trade war.

All six tranches in the offering by Warren Buffett’s firm, ranging from three years to 30 years, offered higher premiums than the previous yen note sale in October. Three-year notes, the biggest part of the offering today, had a spread of 70 basis points compared with 49 basis points in the prior sale.

Berkshire pushed ahead with the yen deal even as market volatility prompted several Japanese companies including Suntory Holdings Ltd. and Nissin Foods Holdings Co. to cancel sales. Buffett has been tapping the Japanese corporate bond market since 2019, and his yen fundraising has been closely watched by investors because his purchases of shares including trading firms have bolstered optimism in the past toward the nation’s equity market.

The US company boosted its holdings in Japan’s five biggest trading houses last month, and Buffett’s annual letter to shareholders in February signaled plans to do so.

The billionaire wrote that the five firms including Mitsubishi Corp. and Itochu Corp. “very successfully operate in a manner somewhat similar to Berkshire itself,” and “ as the years have passed, our admiration for these companies has consistently grown.”

His enthusiasm for the Japanese companies caught the attention of global investors, helping attract funds from overseas and lifting the nation’s Nikkei 225 and Topix share indexes to record highs last year. The two benchmarks have both tumbled more than 10% this year on concern that intensifying trade conflicts between the US and China, the world’s two biggest economies, will slow global growth.