Japanese trading companies, including Mitsubishi, Sumitomo, and Itochu, are stepping up shareholder rewards to maintain investor confidence—despite cautious profit outlooks and rising uncertainty over U.S. tariffs.
Big Names Offer Strong Payouts Despite Profit Warnings
Major Japanese trading houses unveiled a mix of conservative earnings forecasts and generous shareholder return plans. Mitsubishi projected a 26% drop in net profit for the fiscal year ending March, mainly due to the absence of one-time asset sale gains. Still, it announced a 10 yen dividend increase to 110 yen per share and confirmed a 1 trillion yen share buyback program.
Itochu, on the other hand, expects another record profit of 900 billion yen, driven by its non-resource businesses. The company plans to maintain a 50% payout ratio and repurchase up to 2% of its shares for 150 billion yen.
Berkshire Hathaway Raises Stakes in Japanese Traders
Warren Buffett’s Berkshire Hathaway remains a major investor in five Japanese trading houses: Mitsubishi, Mitsui, Sumitomo, Itochu, and Marubeni. Mitsubishi CEO Katsuya Nakanishi said the company has earned Buffett’s trust, citing the recent increase in Berkshire’s ownership stake.
U.S. Tariff Exposure Prompts Loss Provisions
Sumitomo and Marubeni have each set aside billions in contingency reserves to guard against the potential fallout from U.S. tariffs. Marubeni allocated 30 billion yen while Sumitomo set aside 40 billion yen, underscoring the ongoing policy uncertainty between Tokyo and Washington.
Sumitomo announced plans to raise its annual dividend from 130 to 140 yen and will repurchase up to 2.9% of its stock. Marubeni pledged a total shareholder return of 210 billion yen and will buy back 4.2% of shares valued at 70 billion yen.
Can Shareholder Incentives Offset Geopolitical Headwinds?
As Japan navigates economic diplomacy with the U.S., its trading firms are leaning on dividends and buybacks to maintain investor loyalty. Will these strategies be enough to shield valuations from rising global trade tensions?
