Warren Buffett's recent investment in the five major Japanese trading companies, which has yielded $8 billion (approximately 1.25 trillion won) in profits for Berkshire Hathaway, the investment firm he leads, is having a major impact on the Asian economy. This phenomenon, known as the "Buffett Effect," is reverberating not only in Japan but also in India and even South Korea, providing positive economic stimuli to Asian countries.

Buffett's massive investment in the stocks of Japan's five major trading companies – Itochu, Marubeni, Mitsubishi, Mitsui & Co., and Sumitomo – took place in 2020. At the time, Buffett's investment decision breathed life into the Japanese economy, which was struggling with contraction and an aging population. The value of the trading companies that Buffett invested in soared, leading the Nikkei Stock Average to surpass its all-time high, which was set in 1989.

However, the fundamental reason behind the surge in Japanese stock prices was not Buffett but rather the Bank of Japan's negative interest rate policy, the significant depreciation of the yen, and Japan's corporate governance reforms. These policies have borne fruit, improving the performance of Japanese companies and boosting the investment sentiment of foreign investors.

Nevertheless, Buffett's "blockbuster" investment moves have had a significant impact on neighboring Asian countries. In particular, Buffett's statement last week to India's Prime Minister Narendra Modi that "there are many opportunities in a country like India" has instilled high expectations in the Indian economy. Prime Minister Modi has been aiming to make India the global manufacturing hub since his inauguration in 2014 with his "Make in India" policy to foster manufacturing. Therefore, Buffett's remarks have given wings to Modi's policy.

In reality, Buffett's "praise" for India is having a significant influence. Investors interested in India have begun to see potential opportunities in Modi's economic policies, and the Modi government is attempting to benchmark Japan's policies, where Buffett has achieved success, to promote corporate innovation. As a result, global investment bank Jefferies predicts that the market capitalization of the Indian stock market will reach $10 trillion (approximately 1,504 trillion won) by 2030, raising expectations for India's economic takeoff.

Meanwhile, this Asian economic restructuring wave triggered by the "Buffett Effect" is also impacting South Korea. Buffett's success in Japanese trading company stocks has served as a catalyst for the South Korean government and businesses to embrace management innovation that meets international standards. There is a growing realization that transparent and efficient corporate operations are essential to keep pace with the rapidly changing global economic landscape.

These changes in Japan's government and businesses, along with the rapid growth of emerging Asian economies like India, are not simply the result of one person's investment, but rather an indication of the times, a sign of a reshaping global economic structure. Buffett's foresight has served as a catalyst, but it is now a matter of how actively each country can participate in this wave of change.