efc10-27_nq.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:  811-05992                                

JAPAN SMALLER CAPITALIZATION FUND, INC.

(Exact name of registrant as specified in charter)

Two World Financial Center
Building B, 18th Floor
New York, New York 10281-1712

(Address of principal executive offices)

Shigeru Shinohara
Japan Smaller Capitalization Fund, Inc.
Two World Financial Center
Building B, 18th Floor
New York, New York 10281-1712

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 833-0018

Date of fiscal year end: February 28, 2010                                

Date of reporting period: September 1, 2009 – November 30, 2009


Item 1.  Schedule of Investments
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2009
 
 
                           
% of
 
               
Market
   
Unrealized
   
Net
 
   
Shares
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
COMMON STOCKS
                             
Banks and Finance
                             
The Aichi Bank, Ltd.
    27,500     $ 2,558,514     $ 2,219,158     $ (339,356 )     1.3  
 General banking services
                                       
The Bank of Iwate, Ltd.
    29,000       1,682,057       1,798,084       116,027       1.0  
 General banking services
                                       
The Hachijuni Bank, Ltd.
    268,000       1,648,133       1,717,689       69,556       1.0  
 General banking services
                                       
The Keiyo Bank, Ltd.
    377,000       1,825,568       1,952,302       126,734       1.1  
 General banking services
                                       
The Musashino Bank, Ltd.
    95,900       3,521,527       2,555,478       (966,049 )     1.4  
 Regional bank
                                       
The San-in Godo Bank, Ltd.
    293,000       2,543,073       2,639,977       96,904       1.5  
 General banking services
                                       
Total Banks and Finance
      13,778,872       12,882,688       (896,184 )     7.3  
                                         
Chemicals and Pharmaceuticals
                                       
Adeka Corporation
    264,300       2,517,173       2,433,555       (83,618 )     1.4  
 Resin products
                                       
Daicel Chemical Industries, Ltd.
    614,000       2,865,968       3,664,395       798,427       2.1  
 Organic/inorganic chemicals
                                       
Hitachi Chemical Company, Ltd.
    99,800       1,738,143       1,961,816       223,673       1.0  
 Semiconductor materials
                                       
Lintec Corporation
    96,100       1,548,244       1,835,524       287,280       1.0  
 Adhesive products
                                       
Nippon Shokubai Co., Ltd.
    186,000       1,424,124       1,688,848       264,724       1.0  
 Synthetic resins
                                       
Rohto Pharmaceutical Co., Ltd.
    214,000       2,427,766       2,768,023       340,257       1.6  
 Pharmaceuticals manufacturer
                                       
Total Chemicals and Pharmaceuticals
      12,521,418       14,352,161       1,830,743       8.1  
                                         
Electronics
                                       
Taiyo Yuden Co., Ltd.
    212,000       1,504,018       2,183,385       679,367       1.3  
 Electronic components
                                       
Yaskawa Electric Corporation.
    286,000       1,807,713       2,148,528       340,815       1.2  
 Servomotors and industrial robots
                                       
Total Electronics
      3,311,731       4,331,913       1,020,182       2.5  
                                         
Food Manufacturing
                                       
Doutor Nichires Holdings Co., Ltd.
    124,000       2,117,658       1,788,192       (329,466 )     1.0  
 Coffee and restaurant chain
                                       
Hokuto Corporation
    96,400       1,942,339       2,111,006       168,667       1.2  
 Mushrooms
                                       
Nippon Flour Mills Co., Ltd.
    309,000       1,417,943       1,679,094       261,151       1.0  
 Flour
                                       
Total Food Manufacturing
      5,477,940       5,578,292       100,352       3.2  
                                         
Machinery and Machine Tools
                                       
Mimasu Semiconductor Industry Co., Ltd.
    156,800       1,718,836       1,938,949       220,113       1.1  
 Silicon and gallium
                                       
Modec, Inc.
    91,200       1,667,063       1,751,464       84,401       1.0  
 Extraction machinery for marine use
                                       
Total Machinery and Machine Tools
      3,385,899       3,690,413       304,514       2.1  
 
2

JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2009
 
 
                                   
% of
 
                   
Market
   
Unrealized
   
Net
 
   
Shares
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
Miscellaneous Manufacturing
                                       
Kansai Paint Co., Ltd.
    354,000     $ 2,145,602     $ 3,070,398     $ 924,796       1.7  
 Paint
                                       
Nihon Kohden Corporation
    136,500       2,000,240       2,420,151       419,911       1.4  
 Medical equipment
                                       
Tokai Rubber Industries, Ltd.
    162,700       2,512,693       1,715,316       (797,377 )     1.0  
 Rubber and plastic products
                                       
Total Miscellaneous Manufacturing
      6,658,535       7,205,865       547,330       4.1  
                                         
Real Estate and Warehouse
                                       
Daibiru Corporation
    371,300       3,666,539       2,884,176       (782,363 )     1.7  
 Leases office buildings, apartments and hotels
                                       
Sekisui Chemical Co., Ltd.
    296,000       1,946,381       1,766,549       (179,832 )     1.0  
 Prefabricated residential housing
                                       
Sumitomo Real Estate Sales Co., Ltd.
    48,160       1,804,487       1,973,931       169,444       1.1  
 Brokerage Services
                                       
Total Real Estate and Warehouse
      7,417,407       6,624,656       (792,751 )     3.8  
                                         
Restaurants
                                       
Hiday Hidaka Corp.
    150,000       1,379,030       1,795,646       416,616       1.0  
 Chinese restaurant chain
                                       
                                         
Retail
                                       
Canon Marketing Japan Inc.
    138,800       1,980,774       2,043,523       62,749       1.1  
 Canon products distributor
                                       
Shimachu Co., Ltd.
    103,200       2,432,871       2,234,752       (198,119 )     1.3  
 Furniture store chain
                                       
Xebio Co., Ltd.
    99,900       2,018,436       2,057,737       39,301       1.2  
 Sporting goods
                                       
Total Retail
      6,432,081       6,336,012       (96,069 )     3.6  
                                         
Services
                                       
Fuyo General Lease Co., Ltd.
    178,800       4,034,178       4,017,161       (17,017 )     2.3  
 Machinery Leasing
                                       
NEC Networks & System Integration Corporation
    159,600       1,976,991       1,977,280       289       1.1  
 Communication systems
                                       
Nissay Dowa General Insurance Co., Ltd.
    516,000       2,479,683       2,570,264       90,581       1.5  
 Automobile, fire, accident, and marine insurance
                                       
Rakuten, Inc.
    4,571       2,636,350       3,704,567       1,068,217       2.1  
 Manages consumer websites
                                       
Total Services
      11,127,202       12,269,272       1,142,070       7.0  
                                         
Transportation
                                       
Kintetsu World Express Inc.
    101,500       2,186,395       2,704,702       518,307       1.5  
 Distribution services
                                       
Senko Co., Ltd.
    474,000       1,658,462       1,733,643       75,181       1.0  
 Trucking and warehousing
                                       
Total Transportation
      3,844,857       4,438,345       593,488       2.5  
                                         
Wholesale
                                       
Hitachi High-Technologies Corporation
    149,200       2,932,888       2,446,100       (486,788 )     1.3  
 Electronic components
                                       
                                         
TOTAL INVESTMENTS IN COMMON STOCKS
      78,267,860       81,951,363       3,683,503       46.5  
 
3

JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2009
 
 
                                   
% of
 
   
Principal
           
Market
   
Unrealized
   
Net
 
   
Amount
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
   
 
                                 
INVESTMENTS IN FOREIGN CURRENCY
                                       
Hong Kong Shanghai Bank- Tokyo
                                       
  Non- interest bearing account
 
JPY 176,761,212
    $ 2,050,454     $ 2,052,380     $ 1,926       1.2  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
      2,050,454       2,052,380       1,926       1.2  
                                         
TOTAL INVESTMENTS
    $ 80,318,314     $ 84,003,743     $ 3,685,429       47.7  
                                         
OTHER ASSETS LESS LIABILITIES, NET
      92,257,608               52.3  
                                         
NET ASSETS
    $ 176,261,351               100.0  
 
 
 
 
 
+
Non-Income Producing Security.
*
Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $7,865,414.
Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 4,179,985.

 
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of November 30, 2009.




Japanese Yen   86.125   =$1.00
 
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Item 2.  Controls and Procedures.

(a)  The Registrant’s Principal Executive Officer and Principal Financial Officer evaluated the Registrant’s disclosure controls and procedures within 90 days of the filing of this report and concluded that they were effective in providing reasonable assurance that the information required to be disclosed by the Registrant in its reports or statements filed under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
 
(b)  There were no changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3.  Exhibits.

(a)  Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as an exhibit.
 
 
 
5

 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


JAPAN SMALLER CAPITALIZATION FUND, INC.



By:     /s/ Shigeru Shinohara        
        Shigeru Shinohara, President
        (Principal Executive Officer)

Date:  January 25, 2010


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.



By:     /s/ Rita Chopra-Brathwaite         
        Rita Chopra-Brathwaite, Treasurer
        (Principal Financial Officer)

Date:   January 25, 2010
 
 
 
 
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