"Oracle of Omaha" Warren Buffett's Berkshire Hathaway Inc. (BRK.A.US) is preparing to issue multiple yen-denominated bonds on Thursday, sparking market speculation that the legendary investor may be looking to increase investments in Japan.

Berkshire Hathaway launched a seven-part bond deal this week, with maturities ranging from three to 30 years. All bonds, except for the three-year notes, are priced at a premium over the company's yen bonds issued in April of the same maturity. Among them, the 10-year bond has a spread of 82 basis points over the mid-swap rate, compared to 71 basis points in April; the 20-year bond spread is 91 basis points, up from the previous spread of 78 basis points.

Berkshire Hathaway's fundraising plan is closely watched by stock market investors, as Buffett has previously purchased shares in Japanese trading houses and pushed the Nikkei 225 index to a historical high. In his annual letter to shareholders in February, Buffett stated that most of Berkshire Hathaway's investments in Japanese companies are financed through the issuance of yen bonds.

Berkshire Hathaway Issues Yen Bonds Again

If Berkshire's investment choices expand to other stocks such as banks, insurance companies, and shipping companies, as some analysts speculate, this could provide a greater boost to the Japanese market.

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Nomura strategist Tomochika Kitaoka believes that financial companies such as Mitsubishi UFJ Financial Group, Sumitomo Mitsui Trust Holdings, and Sompo Holdings Inc. all fit the characteristics of Berkshire Hathaway's investment portfolio. However, some observers believe that, given Berkshire Hathaway's frequent sales of Bank of America (BAC.US) stocks in recent times, Buffett's focus will still be on trading companies.

This transaction is also a key test of demand for yen-denominated bond offerings. The expansion of long-term bond premiums reflects investors' cautious attitude towards Japan's interest rate environment.

It is widely expected that the Bank of Japan will maintain interest rates unchanged at its next policy meeting on October 31. After Japan stated that it is not appropriate to raise interest rates at present, some economists have postponed their predictions for an interest rate hike at the end of the year.