• Warren Buffett's Berkshire Hathaway issued $628 million of so-called samurai bonds on Friday.
• Several Japanese companies postponed similar bond sales as Trump's tariffs rocked markets.
• Strategist Larry McDonald suggested Buffett was raising fresh funds to go on an epic buying spree.

Warren Buffett's Berkshire Hathaway sold yen-denominated debt worth $628 million on Friday, even as Japanese companies delayed bond issues amid roiling markets and a burgeoning trade war.

The famed investor's conglomerate issued six tranches of bonds ranging from three to 30 years, and offered higher premiums than its last yen note issue in October, per a term sheet viewed by Reuters.

Beverage makers Asahi and Suntory and Cup Noodle owner Nissin Foods postponed yen-bond issues they had planned for this week as President Donald Trump's sweeping tariffs and threats of retaliatory duties tanked stocks and rattled bond markets worldwide.

Buffett, famous for keeping his cool when others panic, forged ahead.

The Berkshire CEO nearly doubled his company's stash of cash and Treasurys to more than $320 billion last year, as he pared key holdings such as Apple and Bank of America and halted stock buybacks. This latest fundraising fueled fresh speculation on social media that the bargain hunter is preparing to pounce as stock prices reel.

"Just wow," Larry McDonald, the author of "The Bear Traps Report" and former head of US macro strategy at Société Générale, posted on X. "Buffett is loaded with cash and he's reaching into the margin account (borrowing) in yen. Next 12 months - he's going to buy this puke festival with both hands."

Betting on Japan

Berkshire has been issuing so-called samurai bonds since 2019 to finance its investments in five Japanese trading houses: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. Friday's yen deal was its smallest so far, which could reflect limited investor appetite given all the market turmoil.

Buffett's company raised its stakes in the five largest "sogo shosha" in March, after he disclosed in his annual shareholder letter in February that the quintet had agreed to let Berkshire increase its ownership of each of them to more than 10%.

The billionaire investor wrote that he and his team originally piled in because they were "amazed" at the companies' cheap valuations.

Buffett also praised their use of capital, quality of management, and shareholder-friendly policies. He pointed to their responsible stock buybacks and dividend increases, and their more modest executive compensation compared to US counterparts.

The famously long-term investor said he expected his planned successor Greg Abel and Abel's successors to keep Berkshire invested in the five companies for "many decades" to come. He also boasted that Berkshire had spent $13.8 billion on the positions, which were worth $23.5 billion, or 70%, more at the end of 2024.

Moreover, Buffett said the five bets were poised to yield $812 million in dividends this year, dwarfing the $135 million of interest on yen bonds that Berkshire expected to pay.

'Like having God just opening a chest'

Buffett's late business partner, Charlie Munger, sang the Japan bet's praises on a podcast in 2023.

"If you're as smart as Warren Buffett, maybe two, three times a century, you get an idea like that," he said. "It was like having God just opening a chest and just pouring money into it."

Munger explained that Berkshire was able to borrow money for 10 years at 0.5% a year and use it to purchase stocks yielding roughly 5% in dividends annually, a type of investment known as a carry trade.

Shares of all five Japanese trading houses have fallen this year with Mitsubishi down about 5%, Marubeni and Sumitomo down about 7%, Itochu down 16%, and Mitsui down 20%. They now trade close to where they did early last year, which could make them appealing targets to an investor with deep pockets and a love for deals.

• Gold prices hit $3,200 for the first time on Friday.
• Trump's tariffs and China's retaliatory action have roiled global markets.
• A BlackRock strategist said gold was a better hedge than Treasury bills amid the market turmoil.

Gold hit another record high above $3,200 on Friday — and is a better way to protect against the ongoing market turmoil than Treasury bills, a BlackRock executive said.

Wei Li, global chief investment strategist at the asset manager, wrote in a LinkedIn post on Thursday that higher exchange rates and "currency down" were abnormal.

"Also not normal — risk off, #dollar and Treasuries down. I will keep saying it: #gold is a better diversifier than Treasuries in this environment of high debt."

Fears over the longer-term effects of President Donald Trump's trade tariffs have triggered an aggressive sell-off of US bonds. Yields have continued to rise this week, with the 10-year Treasury yield up almost 4.4% on Friday.

Treasurys have traditionally been considered one of the safest investments available, but that perception may be starting to change.

The dollar has also suffered amid the turmoil, hitting a three-year low against the euro and a 10-year low against the Swiss franc.

"In this new regime characterized by 1/ #inflationary pressure and 2/ high #debt, gold has been and could continue to be a better diversifier than long-duration Treasuries," Li wrote in an earlier LinkedIn post.

Last month gold broke through the $3,000 level for the first time. In the days following Trump's tariff announcement on April 2, the metal went as high as about $3,150 before retreating.

Gold has since regained momentum as investors seek out safe-haven assets, which typically maintain or increase their value during market turbulence.

In a Friday note, UBS analysts raised their 2025 gold price target to $3,500, citing "escalating tariff uncertainty, weaker growth, higher inflation and lingering geopolitical risks."

"Gold seems to be unfazed by higher US yields," they wrote, adding that the metal has stood out this year compared with other safe havens including Treasurys, the franc, and the yen.

Analysts at Bank of America also have a price target of $3,500 for gold.

• US Treasury yields have spiked sharply in recent days.
• Surging US bond yields appear to reflect rising fears about the global economic impact of tariffs.
• US bonds are traditionally considered one of the safest assets, so falling prices are concerning.

US Treasury bond prices have cratered, and yields have spiked sharply in recent days as fears mount about the longer-term impacts of President Donald Trump's escalating trade war around the world.

The yield on the 10-year US Treasury bond has risen around 12% since Monday, briefly climbing above 4.5% by early Wednesday morning. The five-year US Treasury yield has risen 13% in the same time, hitting 4%.

Bonds are loans that investors make to an entity such as a company or government, usually in exchange for interest payments on a set schedule, with the initial investment returned at maturity as well.

Bond yields and prices move inversely, with yields rising and prices falling in times of trouble, reflecting increased risk for investors.

US bonds are traditionally considered to be among the safest of safe-haven assets as the likelihood of a failed repayment by the US government is seen as incredibly unlikely. Investors rushing to sell them off is unusual and generally seen as a sign of market distress.

Treasurys under pressure

Investors selling US bonds come amid worries that President Donald Trump's new tariffs, which came into effect on Wednesday, may lead to rising inflation and increase the chance of a recession.

This, in turn, would likely slow or even halt expected interest rate cuts from the Federal Reserve.

Analysts at Deutsche Bank said in a note on Tuesday that the heavy sell-off "spoke to broader concerns about the safety of US assets and their capacity to act as a haven in times of market stress."

There's also market speculation that some of the sell-off may be down to China getting rid of some of its $761 billion US Treasury holdings. In an executive order on Tuesday, Trump raised tariffs on China to 104%.

Lin Jian, Beijing's foreign affairs spokesperson, accused the US of "bullying practices" on Wednesday, soon before China announced retaliatory tariffs of 84% on US goods.

"A trend which will be watched closely is an apparent loss, whether temporary or otherwise, of US assets' safe-haven status. Treasurys sold off heavily amid some speculation China and other parties are dumping their holdings as a retaliatory tool," said Russ Mould of UK-based investment platform AJ Bell.

Fed action

The sell-off in Treasurys has also influenced global bond markets, with UK and Japanese yields climbing since Monday.

George Saravelos, Deutsche Bank's head of FX research, told clients in a note this week that continuing disruption could push the Federal Reserve to buy US bonds to support the market.

Should disruption continue, there would be "no other option for the Fed but to step in with emergency purchases of US Treasurys to stabilize the bond market," Saravelos' team wrote.

"While we suspect the Fed could be successful in stabilizing the market in the short-term, we would argue there is only one thing that can stabilize some of the more medium-term financial market shifts that have been unleashed: a reversal in the policies of the Trump administration itself."

• Investors are looking for discounted Russian assets that could jump in value on a Ukraine peace deal.
• President Donald Trump has fueled hopes the war might end soon and Russia could rejoin global markets.
• Risks include a resumption of the conflict and a reimposition of sanctions.

Investors are quietly searching for beaten-down Russian assets that could surge in value if a peace deal is struck and capital floods back into the country. It won't be easy money.

Traders have been snapping up shares of foreign-listed Russian companies and bought Kazakhstan's tenge currency as a ruble proxy, Bloomberg reported. Wall Street banks have been hunting Russian corporate bonds to satisfy demand from Middle Eastern family offices, and pitching their clients on ruble-linked derivative contracts called "non-deliverable forwards" that bypass sanctions, per the outlet.

"There's an aggressive search for securities of Russian issuers around the world," Moscow-based investment banker Evgeny Kogan told Bloomberg. "Investors in general are asking how quickly they can enter the Russian market."

Russia's invasion of Ukraine in early 2022 sent investors scattering and spurred Western countries to impose sanctions that have choked Russia's banking sector and wider economy.

US President Donald Trump is working to broker an end to the war and spoke to Russian President Vladimir Putin on Tuesday, but the pair couldn't reach terms on a cease-fire meaning further negotiations lie ahead.

Rising ruble

Eswar Prasad, a senior professor of trade policy at Cornell University and a senior fellow at the Brookings Institution, told Business Insider: "The prospect of a peace deal and the lifting of sanctions on Russia is likely to result in a wave of financial capital flowing into the country in the hopes of profiting from rebounds of its economy, financial markets, and currency."

Trump's confidence that a truce isn't far away has contributed to the Russian ruble rising more than 20% against the dollar this year. The currency is now the strongest it's been in more than seven months.

However, a combination of sanctions and internal controls has made it tricky for Western institutional investors to bet on Russia. That has fueled demand for non-deliverable forwards that don't involve any Russian nationals or physical assets.

"The main ruble trade is in the NDF market but it is largely hedge funds participating in this trade due to the relatively low liquidity," Roger Mark, a fixed-income analyst at Ninety One, told BI.

"The rationale is clear — potential spot appreciation on the hope of the war ending and a normalization in Russia's economic relationship with the US/West," he said.

'High risk'

Still, Mark cautioned that a cease-fire is far from assured, Trump could still escalate sanctions against Moscow, the ruble has strengthened considerably already, and reopening Russia to the world could lead to capital flowing out instead of in.

"With sanctions risks still meaningful amid an uncertain policy outlook, it remains a high-risk currency for institutional investors to allocate to, especially given its poor liquidity and off-benchmark nature," Mark said.

Betting on Russian assets also poses legal and reputational risks to investors if they act too soon, and even if Russia and Ukraine lay down arms, there's no guarantee that conflict won't flare up again.

"Uncertainty about the durability of any peace deal and the possibility of the reimposition of sanctions in the future could restrain such capital inflows into Russia, once the initial euphoria has passed," Prasad said.

• UK markets are a mess with yields on government bonds at historic highs and the pound tanking.
• Worries about inflation, public finances, and sticky interest rates are behind the chaos.
• Here's a breakdown of what's going on and what it means for Britain.

UK markets are roiling as wary investors prepare for trouble. Here's a closer look at what's happening — and what it means for the British people and their beleaguered economy.

Gilts and pounds

Yields on UK government bonds, or "gilts," have recently surged, while the pound has sunk against the dollar and lost ground versus the euro.

The benchmark 10-year gilt yield jumped from about 4.2% at the start of December to 4.9% on Monday, its highest level since 2008. Over the same period, the 30-year gilt yield leaped from around 4.7% to almost 5.5% for the first time since 1998.

Meanwhile, the pound weakened to a 14-month low against the dollar on Monday, with £1 worth $1.21 compared to $1.34 as recently as September. Sterling also revisited its November low against the euro with £1 worth 1.19 euros.

Prices and rates

Gilt yields have climbed and the greenback has gained against the pound because of the UK's bleak economic outlook.

Official estimates show the economy failed to grow in the third quarter of 2024. In late November, Goldman Sachs economists forecast a meager 1.2% growth rate for 2025, below the Bank of England's 1.5% estimate.

Annualized inflation spiked to a multi-decade high of more than 11% in October 2022, spurring the BoE to raise its base interest rate to 5.25% by August 2023 — a huge increase from virtually zero going into 2022.

Inflation has cooled significantly from its peak but accelerated to 3.5% last November, far outpacing the BoE's target rate of 2%. The central bank has trimmed its base rate to 4.75%, but signs of stubborn inflation have cut the chances of a flurry of further cuts this year.

President-elect Donald Trump's plans to impose tariffs and cut taxes once he enters office have also stoked global inflation fears, eroding hopes for rapid rate cuts in the UK and other countries.

Steeper interest rates encourage saving over spending and investing and make borrowing more expensive, which can ease upward pressure on prices but can also temper growth.

Public purse pressure

Investors are worried the UK government is overspending. It borrowed about £113 billion in the eight months through November 2024, raising the national debt to about £2.8 trillion — more than double the level before the financial crisis of 2008.

Rachel Reeves, the Chancellor (finance minister), has signaled she may rein in spending by making greater cuts to public services — but tightening the purse strings threatens to further weaken growth.

Concerns about persistent inflation, the public finances, and stagnation have hammered market sentiment toward the UK economy. Investors now demand a higher return to hold government debt, which has pushed up gilt yields.

Flight to safety

The prospect of higher rates for longer should benefit the pound because the currency's holders can expect to earn more interest. But that effect is being outweighed by the dollar's strength, underpinned by similar concerns in the US of stubborn inflation, sticky rates, and rising Treasury yields. Investors are flocking to the greenback as a haven asset, heaping pressure on the pound.

"Bond market turbulence, fears over unsustainable debt, and a lack of investor confidence in Britain's long-term prospects are all combining to pull sterling lower," Nigel Green, CEO of deVere Group, said in a note.

"The combination of a robust dollar and a weakening pound is accelerating the capital flight from sterling. Investors are turning to safer currencies and assets, as the UK appears increasingly fragile in this turbulent environment."

Flashes of the past

The upswing in gilt yields and the pound's retreat against the dollar evoke the crisis sparked by then-Prime Minister Liz Truss and Chancellor Kwasi Kwarteng's mini-budget in September 2022.

The tax cut plans spooked investors with the prospect of reckless government borrowing, resurgent inflation, and interest rates staying higher for longer.

With some pension funds on the brink of collapse, the BoE stepped in to shore up markets and calm the situation. The chaos dissipated but Truss resigned a few weeks later.

This time, government officials have indicated that gilt markets are functioning normally and emergency intervention isn't warranted.

Prime Minister Keir Starmer said on Monday that the government would continue to comply with its fiscal rules and reiterated his confidence in Reeves.

Budget pressure

The UK government funds itself partly by issuing gilts, so higher yields mean it has to pay more interest to bondholders. That raises its borrowing costs and eats into its tax revenue, leaving it with less money to spend on public services.

"The Chancellor already had limited wiggle room and the risk is that she may have to either cut spending or raise taxes," Susannah Streeter, head of money and markets at Hargreaves Lansdown, said in an emailed note.

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, made a similar point in an emailed note: "Rachel Reeves is losing her fiscal headroom and her manoeuvre margin with every basis point rise in borrowing costs, and that muddies the UK's growth outlook."

Feeling the squeeze

Higher gilt yields mean steeper interest payments for households and businesses too, tempering the economy's growth prospects further.

Moreover, a weaker pound makes imports more expensive. That could fuel inflation, curb growth, pinch businesses that rely on foreign goods, and turn the screw on households already mired in a cost-of-living crisis.

Many consumers are struggling after sharp rises in the cost of food, fuel, housing, and other essentials since the pandemic — especially when they're paying more for their mortgages, credit cards, and other debts due to rate rises.

"Inflationary pressures remain persistent and elevated, while at the same time the growth backdrop, exacerbated by the recent budget, is deteriorating and straining government finances further," Mark Dowding, BlueBay chief investment officer at RBC Global Asset Management, said in an emailed note.

"Moreover, households will face rises in energy costs, water bills and council tax in April, adding to the squeeze in consumer budgets."

Savills recently estimated that nearly 700,000 UK homeowners face higher mortgage costs when their fixed-rate deals ended this year. Many hoped the BoE would steadily cut its base rate and mortgage rates would decline.

"But now, the newly elected Labour government, which promised to rescue the country, improve finances, and boost growth, faces its own reckoning," Ozkardeskaya wrote.

"To deliver on its ambitions, it needs market support — a resource proving elusive. Without it, borrowing costs will spiral higher, forcing tougher choices: more taxes, less spending, and weaker growth. And none of that bodes well for the pound."