This week's violent global market meltdown started in Japan — where Warren Buffett has big investments — but the damage was limited. The Nikkei 225 index , a benchmark for Japanese stocks, plunged 12.4% on Monday, its worst day since "Black Monday" in 1987, triggering a domino effect globally.
The sell-off was triggered by a small rate hike by the Bank of Japan , lifting rates to their highest in 15 years and unwinding of the yen "carry trade." But the market managed to recoup most of the steep losses and closed the week down only 2.5%.
The stocks Buffett holds cratered as much as 30% initially, but bounced back by the end of the week along with the broader market. Berkshire Hathaway , Buffett's holding company, owns an 8% stake in each of the five leading Japanese trading houses— Itochu , Marubeni , Mitsubishi , Mitsui and Sumitomo — with its total investment worth about $20 billion. Mitsui fared the worst this week, down 6.
2%, while Mitsubishi was the outperformer with a decline of just 1.7%. The Japanese trading houses also reported second-quarter earnings earlier this week, mostly exceeding analyst expectations and maintaining their full-year guidance.
Year to date, shares of Itochu and Mitsubishi are up by more than 10%, while Marubeni, Mitsui and Sumitomo have risen less than 10%. $8 billion paper profit The Oracle of Omaha first started selling Japanese debt in 2019 and used the proceeds to fund Berkshire's purchase of stakes in five local mini-conglomerates, k.