Japanese Trading Houses Reversal Driven by Berkshire's Holdings

Japanese trading house stocks experienced a reversal on Friday after surging in the previous session. The sector's gains were largely driven by Berkshire Hathaway's intentions to increase its holdings in the five top trading houses.

Mitsubishi Corp, which led the gains this week, fell 3.3% on Friday while Mitsui slid 4.3%. Sumitomo and Marubeni followed suit with declines of 0.4% and 2.4%, respectively. However, Itochu bucked the trend by rising 0.5%.

The sector's underperformance was also attributed to a stronger yen, which weighed on Japanese stocks with high export exposure. As the Japanese currency firmed sharply on speculation of an interest rate hike in September, the trading houses' foreign-currency businesses suffered as they are sensitive to strength in the yen.