Warren Buffett / Berkshire Hathaway did not make $24 billion by directly
trading or shorting Japanese Government Bonds (JGBs) during the crash. There is no public evidence of that.
The $24 billion figure comes from gains
on long-term equity investments in Japanese companies that benefited
from (or held up well during) Japan's economic transition and bond market
turmoil.
Quick Context on Japan's Bond Market Turmoil
(2025–2026)
- After
decades of ultra-low/negative rates and yield curve control, the Bank of
Japan (BOJ) normalized policy.
- Rising
inflation, fiscal concerns, and policy shifts led to a sharp sell-off in JGBs — yields surged
to multi-decade highs (e.g., 30-year and 40-year bonds breaking records).
- This caused
volatility, price crashes in long-dated bonds, global market ripples, and
headlines about a potential "bond crisis" or debt concerns.
Higher yields
reflected the end of deflation and a shift to a more "normal" economy
— which was ultimately positive for many Japanese corporate earnings and stocks.
How Buffett Profited (~$24 Billion Gain)
Berkshire's
strategy was value investing in stocks,
smartly financed, not bond trading :
1.
The Equity Bet (2019–2020 onward) :
o Bought stakes in Japan's five major
trading houses (sogo shosha) : Itochu,
Marubeni, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp.
o Initial ~5% stakes cost ~$6–6.5
billion.
o Added more over time (total cost basis
~$13–15 billion) : stakes increased to ~7–10%+ in some.
o These diversified giants (commodities,
energy, logistics, etc.) were undervalued with strong cash flows.
o As of early 2026 reports : Holdings
worth ~$30–38 billion → ~$24 billion
unrealized gain.
2.
The Financing Masterstroke (Yen Bonds) :
o Issued large yen-denominated bonds at rock-bottom rates (~1% or less) to fund
the purchases.
o Created a natural hedge (yen debt matched yen assets) and positive carry :
Dividends from the stocks (~4%) far exceeded borrowing costs.
o Weak yen also produced GAAP accounting
gains on the debt.
o Berkshire has issued multiple rounds
of yen bonds over the years (including refinancings in 2025–2026) and remains
one of the largest foreign issuers in Japan.
3.
Timing with the "Crisis" :
o The bond sell-off and rate
normalization signaled Japan's exit from deflation → boosted corporate
confidence, earnings, and stock prices (Nikkei rallied strongly).
o Trading houses thrived on global
exposure and higher activity. Stocks stayed "red hot" even as bonds
crashed.
o Buffett positioned years earlier — it
wasn't a reactive trade on the crash, but it aligned perfectly.
Bottom Line
- Not a bond crisis trade : No reports of Berkshire shorting JGBs,
betting against bonds, or timing the crash directly. Gains are from
equities + clever low-cost yen leverage.
- Classic Buffett :
Buy wonderful businesses at fair prices, use cheap financing, hold
long-term, and benefit from macroeconomic shifts.
- The bond
turmoil was more of a backdrop that highlighted the strength of his
equity-focused Japan bet.
👉 For the latest
exact numbers, check Berkshire's annual shareholder letters or regulatory
filings. Markets move, so paper gains can fluctuate. This remains one of
Berkshire's standout international successes.
