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: 811-8002
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JAPAN SMALLER CAPITALIZATION FUND, INC.
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(Exact name of registrant as specified in charter)
Two World Financial Center
Building B, 22nd Floor
New York, New York 10281-1712
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(Address of principal executive offices)
Yasushi Suzuki
Japan Smaller Capitalization Fund, Inc.
Two World Financial Center
Building B, 22nd Floor
New York, New York 10281-1712
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 833-0018
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Date of fiscal year end: February 28, 2005
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Date of reporting period: September 1, 2004 - November 30, 2004
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Item 1. Schedule of Investments
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFILIATED ISSUERS
NOVEMBER 30, 2004
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
COMMON STOCKS
Automotive Equipment and Parts
Calsonic Kansei Corporation........................................... 240,000 $1,716,350 $1,644,505 ($71,845) 1.0
Radiators, mufflers and air conditioning systems
F.C.C. Co., Ltd....................................................... 10,000 319,835 313,045 (6,790) 0.2
Clutches and facings
Futaba Industrial Co., Ltd............................................ 142,200 2,430,898 2,302,929 (127,969) 1.3
Mufflers and exhaust manifolds
Musashi Seimitsu Industry Co., Ltd.................................... 140,200 1,309,411 3,145,599 1,836,188 1.8
Ball joints, camshafts and gears
Nippon Cable Systems Inc.............................................. 89,700 860,500 1,197,971 337,471 0.7
Control cables
Nippon Piston Ring Co., Ltd........................................... 537,000 1,030,113 1,144,989 114,876 0.7
Internal combustion engine parts
Nissin Kogyo Co., Ltd................................................. 58,000 1,292,736 1,703,237 410,501 1.0
Brake systems
Nittan Valve Co, Ltd.................................................. 312,000 1,970,426 1,920,140 (50,286) 1.1
Engine valves
U-Shin, Ltd........................................................... 212,000 1,515,104 1,471,138 (43,966) 0.9
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Door locks
Total Automotive Equipment and Parts.............................................. 12,445,373 14,843,553 2,398,180 8.7
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Banks and Finance
The Bank of Fukuoka, Ltd. ............................................ 300,000 1,538,430 1,898,624 360,194 1.1
Deposits, loans and exchange transactions
The Hiroshima Bank, Ltd............................................... 405,000 1,797,490 1,986,141 188,651 1.2
General banking services
The Hyakugo Bank, Ltd................................................. 205,000 1,145,336 1,170,236 24,900 0.7
General banking services
IBJ Leasing Company, Limited.......................................... 51,800 860,799 853,460 (7,339) 0.5
Leases general machinery, aircrafts and computer
Kansai Urban Banking Corporation...................................... 729,000 1,261,260 1,356,542 95,282 0.8
General banking services
Okasan Holdings, Inc. ................................................ 221,000 1,455,508 1,175,896 (279,612) 0.7
Financial services
Ricoh Leasing Co., Ltd. .............................................. 122,000 2,833,867 3,074,239 240,372 1.8
Credit sales and leasing
Sanyo Shinpan Finance Co., Ltd........................................ 45,700 2,525,721 2,936,528 410,807 1.7
Consumer financing
Yamanashi Chuo Bank, Ltd.............................................. 70,000 406,460 411,126 4,666 0.2
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Commercial banking services
Total Banks and Finance........................................................... 13,824,871 14,862,792 1,037,921 8.7
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Chemicals and Pharmaceuticals
Arisawa Manufacturing Co., Ltd........................................ 104,900 2,407,519 4,371,680 1,964,161 2.6
Glassfibers and insulating resins
C. Uyemura & Co., Ltd................................................. 140,000 2,318,000 4,206,242 1,888,242 2.5
Chemicals
Hisamitsu Pharmaceutical Co., Inc..................................... 177,000 3,186,383 3,218,182 31,799 1.9
Pharmaceutical products
Shizuokagas Co., Ltd.................................................. 396,000 1,147,819 1,604,264 456,445 0.9
Natural gas supplier
T & K Toka Co., Ltd................................................... 85,400 1,368,137 1,804,342 436,205 1.0
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Ink for printing
Total Chemicals and Pharmaceuticals............................................... 10,427,858 15,204,710 4,776,852 8.9
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Electric
Mirai Industry Co., Ltd............................................... 261,000 2,586,427 1,973,057 (613,370) 1.1
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Plastic molded electric materials
Total Electric.................................................................... 2,586,427 1,973,057 (613,370) 1.1
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JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFILIATED ISSUERS
NOVEMBER 30, 2004
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
Electronics
Chiyoda Integre Co., Ltd.............................................. 116,520 $1,320,898 $2,235,991 $915,093 1.3
Electronic components
Cosel Co., Ltd........................................................ 76,500 1,986,521 1,812,779 (173,742) 1.1
Electrical machinery
Dainippon Screen Mfg. Co., Ltd........................................ 338,000 1,499,003 1,844,292 345,289 1.1
Electronic components
Fuji Electric Industry Co., Ltd....................................... 35,400 372,233 276,530 (95,703) 0.2
Electronic parts
Fukuda Denshi Co., Ltd................................................ 27,000 656,971 871,390 214,419 0.5
Medical electronic equipment
Kuroda Electric Co., Ltd.............................................. 121,400 738,396 2,635,550 1,897,154 1.5
Materials and components
Meiko Electronics Co., Ltd............................................ 44,800 1,031,157 1,059,430 28,273 0.6
Printed circuit boards
Mimasu Semiconductor Industry Co., Ltd................................ 39,300 628,084 525,244 (102,840) 0.3
Semiconductor materials
Shinko Electric Industries Co., Ltd................................... 36,300 922,839 978,038 55,199 0.6
Semiconductor packages
Sumisho Electronics Co., Ltd.......................................... 71,200 923,917 779,764 (144,153) 0.5
Office systems
Toshiba Tec Corp...................................................... 190,000 784,020 845,222 61,202 0.5
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Electronic equipment manufacturing
Total Electronics................................................................. 10,864,039 13,864,230 3,000,191 8.2
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Food Manufacturing
Arcs Co., Ltd......................................................... 59,480 409,964 709,632 299,668 0.4
Supermarket chain
Ariake Japan Co., Ltd................................................. 50,083 1,021,687 1,208,632 186,945 0.7
Natural seasonings
Kakiyasu Honten Co., Ltd.............................................. 57,800 487,630 817,872 330,242 0.5
Processed meat products, fresh meats, and side dishes
Nippon Flour Mills Co., Ltd........................................... 302,000 1,366,704 1,314,189 (52,515) 0.8
Flour and grain
Ozeki Co., Ltd........................................................ 24,000 1,132,929 548,944 (583,985) 0.3
Supermarket chain
Plenus Co., Ltd....................................................... 51,560 1,301,087 1,459,151 158,064 0.9
Japanese lunch-boxes
Q'sai Co., Ltd........................................................ 132,000 589,888 1,315,139 725,251 0.8
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Frozen and processed foods and juice drinks
Total Food Manufacturing.......................................................... 6,309,889 7,373,559 1,063,670 4.3
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Information and Software
Argo Graphics Inc..................................................... 72,000 896,182 1,918,977 1,022,795 1.1
Computer aided design software
Kyowa Exeo Corporation................................................ 107,000 868,003 942,654 74,651 0.6
Designs, constructs, maintains communication and electrical facilities
Netmarks Inc.......................................................... 290 806,554 930,316 123,762 0.6
Designing, developing, and building network systems
Net One Systems Co., Ltd.............................................. 436 1,673,709 1,778,988 105,279 1.0
Designs, installs, maintains, and sells computer network systems
Total Information and Software.................................................... 4,244,448 5,570,935 1,326,487 3.3
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Iron and Steel
Mitsubishi Steel Mfg. Co., Ltd........................................ 660,000 942,060 991,471 49,411 0.6
Steel producers
Nisshin Steel Co., Ltd................................................ 1,080,000 2,289,795 2,574,918 285,123 1.5
Steel producers
Tokyo Steel Manufacturing Co., Ltd.................................... 135,000 2,226,541 2,199,408 (27,133) 1.3
Electrical furnace steel producer
Yamato Kogyo Co., Ltd................................................. 252,000 3,361,820 3,385,075 23,255 2.0
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Steel producers
Total Iron and Steel.............................................................. 8,820,216 9,150,872 330,656 5.4
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JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFILIATED ISSUERS
NOVEMBER 30, 2004
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
Machinery and Machine Tools
CKD Corporation....................................................... 75,000 $429,945 $441,219 $11,274 0.3
Pneumatic equipment and control devices
Makino Milling Machine Co., Ltd....................................... 232,000 1,259,864 1,250,165 (9,699) 0.7
Industrial machinery
Nachi-Fujikoshi Corp.................................................. 720,000 2,069,087 1,884,086 (185,001) 1.1
Manufactures bearings
Organo Corporation.................................................... 107,000 562,670 522,659 (40,011) 0.3
Water treatment equipment
Shimadzu Corporation.................................................. 349,000 1,845,317 1,955,049 109,732 1.2
Precision tools and equipment
Tsubaki Nakashima Co., Ltd............................................ 141,500 1,755,612 1,741,665 (13,947) 1.0
Bearing balls, blowers and precision ball screws
Yamazen Corporation................................................... 502,000 1,531,825 1,542,295 10,470 0.9
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Machinery and tools
Total Machinery and Machine Tools................................................. 9,454,320 9,337,138 (117,182) 5.5
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Miscellaneous Manufacturing
Central Glass Co., Ltd................................................ 200,000 1,075,656 1,362,667 287,011 0.8
Glass products
Daio Paper Corporation................................................ 90,000 886,901 812,076 (74,825) 0.5
Paper, pulp, and paperboard
Dowa Mining Co., Ltd.................................................. 340,000 2,130,463 2,211,087 80,624 1.3
Produces various metal-related products
Dynic Corporation +................................................... 339,000 1,090,970 1,317,494 226,524 0.8
Bookbinding cloth
Hitachi Construction Machinery Co., Ltd............................... 133,400 1,605,873 1,652,309 46,436 1.0
Manufactures construction machinery
JSP Corporation....................................................... 174,000 2,348,450 1,949,448 (399,002) 1.1
Polystyrene products
Kansai Paint Co., Ltd................................................. 385,000 2,401,554 2,320,896 (80,658) 1.4
Manufactures and sells a wide range of paints
Kitagawa Industries Co., Ltd.......................................... 26,400 380,394 429,851 49,457 0.2
Metal products and fasteners
Mani, Inc............................................................. 79,800 1,378,387 3,078,155 1,699,768 1.8
Medical goods and equipment
Mizuno Corporation.................................................... 184,000 670,619 768,599 97,980 0.5
Sporting goods
Nichiha Corporation................................................... 64,600 575,333 329,994 0.5
Ceramic exterior walls and fiber boards 905,327
Nippon Kodoshi Corp................................................... 188,000 2,839,396 1,585,191 (1,254,205) 0.9
Paper for electric insulation
Riso Kagaku Corporation............................................... 38,600 1,486,517 1,567,494 80,977 0.9
Printing and copying machines
Sanei-International Co., Ltd.......................................... 44,000 1,597,898 1,475,480 (122,418) 0.9
Fashion apparel
Secom Techno Service Co., Ltd......................................... 36,000 964,967 1,413,065 448,098 0.8
Security systems, provides maintenance service
SK Kaken Co., Ltd..................................................... 54,500 1,291,387 1,901,531 610,144 1.1
Paints
Total Miscellaneous Manufacturing................................................. 22,724,765 24,750,670 2,025,905 14.5
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Oil and Gas
Cosmo Oil Company, Ltd................................................ 297,000 836,700 860,661 23,961 0.5
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Domestic crude oil refiner
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFILIATED ISSUERS
NOVEMBER 30, 2004
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
Real Estate and Warehouse
Daibiru Corporation.................................................... 138,000 $938,730 $942,915 $4,185 0.6
Leases office buildings, apartments and hotels
Leopalace21 Corporation................................................ 18,000 190,703 295,871 105,168 0.2
Builds, repairs, sells, leases and manages real estate properties
Recrm Research Co., Ltd................................................ 1,725 2,292,680 2,608,064 315,384 1.5
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Building management
Total Real Estate and Warehouse................................................... 3,422,113 3,846,850 424,737 2.3
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Restaurants
Colowide Co., Ltd...................................................... 49,000 578,445 529,986 (48,459) 0.3
Japanese style pub restaurant chain
Saint Marc Co., Ltd.................................................... 54,100 1,793,379 2,244,117 450,738 1.3
Restaurants and bakery shop chain
Y's Table Corporation +................................................ 137 613,336 519,161 (94,175) 0.3
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Operates a variety of restaurants
Total Restaurants................................................................. 2,985,160 3,293,264 308,104 1.9
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Retail
Art Vivant Co., Ltd. .................................................. 91,200 $731,495 $777,825 $46,330 0.4
Arts and crafts
Askul Corporation...................................................... 7,100 365,504 454,158 88,654 0.3
Catalog shopping
Cawachi Limited........................................................ 40,300 1,121,428 1,714,644 593,216 1.0
Drug store chain
Kitamura Co., Ltd...................................................... 122,000 999,328 987,304 (12,024) 0.6
Consumer electronic
Meganesuper Co., Ltd................................................... 182,760 2,597,236 3,383,132 785,896 2.0
Eye glasses chain
USS Co., Ltd........................................................... 4,990 119,225 444,448 325,223 0.2
Automobile auction
Village Vanguard Co., Ltd.+ ........................................... 225 1,717,338 1,853,557 136,219 1.1
Books, cd's, videos and office supplies
Xebio Co., Ltd. ....................................................... 60,400 1,664,697 1,826,400 161,703 1.1
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Sporting goods
Total Retail...................................................................... 9,316,251 11,441,468 2,125,217 6.7
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Services
Alps Logistics Co., Ltd................................................ 89,000 625,430 1,992,537 1,367,107 1.2
Transportation
Daiwa Logistics Co., Ltd............................................... 31,000 234,815 261,388 26,573 0.2
Transports housing materials and builidng steel frames
Fullcast Co., Ltd...................................................... 848 870,164 2,243,691 1,373,527 1.3
Human resources
Hitachi Transport System, Ltd.......................................... 98,000 739,446 822,524 83,078 0.5
Freight truck and marine transportation
Maeda Road Construction Co., Ltd....................................... 98,000 690,157 719,946 29,789 0.4
Constructs highways, runways, and harbor facilities
Nissin Healthcare Food Service Co., Ltd................................ 91,100 1,114,206 1,677,554 563,348 0.9
Nursing home caterer
Nova Corporation....................................................... 101,000 605,049 879,027 273,978 0.5
Language instruction courses
Obayashi Corporation................................................... 322,000 1,622,900 1,997,286 374,386 1.2
General contractor
Okinawa Cellular Telephone Company..................................... 439 2,021,412 1,710,389 (311,023) 1.0
Cellular and car phone services
Sumisho Auto Leasing Corporation....................................... 56,400 2,106,648 2,514,441 407,793 1.5
Auto leasing and maintenance
TIS Inc................................................................ 72,000 2,535,064 3,042,450 507,386 1.8
Integrated system service
TKC Corporation........................................................ 26,100 433,063 407,765 (25,298) 0.2
Consulting services
Toei Animation Co., Ltd................................................ 30,300 1,542,853 1,236,315 (306,538) 0.7
Animated cartoon movies production
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFILIATED ISSUERS
NOVEMBER 30, 2004
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
Services (cont'd)
Tohokushinsha Film Corporation......................................... 79,800 $1,254,729 $1,964,450 $709,721 1.2
Produces tv programs, movies and commercial films
Tow Co., Ltd........................................................... 73,300 493,331 441,874 (51,457) 0.3
Entertainment
Yusen Air & Sea Service Co., Ltd....................................... 80,600 2,465,563 2,694,999 229,436 1.6
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Domestic and international air freight forwarding
Total Services.................................................................... 19,354,830 24,606,636 5,251,806 14.5
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Textiles and Apparel
United Arrows Limited.................................................. 12,600 200,576 290,027 89,451 0.2
Casual clothes
Workman Co., Ltd....................................................... 68,000 1,229,140 1,436,712 207,572 0.8
Uniforms
World Co., Ltd......................................................... 44,200 1,377,242 1,559,294 182,052 0.9
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Apparel manufacturers
Total Textiles and Apparel........................................................ 2,806,958 3,286,033 479,075 1.9
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Wholesale
Kato Sangyo Co., Ltd................................................... 25,000 233,967 325,887 91,920 0.2
Processed foods
Kondotec, Inc.......................................................... 156,000 1,011,962 1,179,298 167,336 0.7
Construction materials
Toba, Inc.............................................................. 15,000 142,260 232,603 90,343 0.1
Trading company for control systems
Toshin Denki Co., Ltd.................................................. 62,600 789,850 1,140,609 350,759 0.7
Lighting equipment and electrical engineering materials
Trusco Nakayama Corporation............................................ 44,700 719,543 664,998 (54,545) 0.4
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Industrial machinery
Total Wholesale................................................................... 2,897,582 3,543,395 645,813 2.1
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TOTAL INVESTMENTS IN COMMON STOCKS................................................ 143,321,800 167,809,823 24,488,023 98.5
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Principal Market Unrealized Net
Amount Cost Value Gain or Loss Assets
------ ---- ----- ------------ ------
INVESTMENTS IN FOREIGN CURRENCY
Hong Kong Shanghai Bank- Tokyo
Non- interest bearing account.................... JPY 218,094,351 2,123,851 2,113,727 (10,124)* 1.2
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TOTAL INVESTMENTS IN FOREIGN CURRENCY............................................. 2,123,851 2,113,727 (10,124) 1.2
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TOTAL INVESTMENTS ................................................................ 145,445,651 169,923,550 24,477,899 99.7
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OTHER ASSETS LESS LIABILITIES, NET...................................... 469,880 0.3
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NET ASSETS.............................................................. $170,393,430 100.0
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+ Non-Income Producing Security
* Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost was $29,952,556. Aggregate gross
unrealized depreciation for all securities in which there is an excess of tax
cost over value was $5,464,533.
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of November 30, 2004.
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.
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/ Yasushi Suzuki
Yasushi Suzuki, President
(Principal Executive Officer)
Date: January 21, 2005
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 persons 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 21, 2005