efc8-1039_emailformnq.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, 22nd 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, 22nd 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 29, 2008                      

Date of reporting period:           March 1, 2008 – May 31, 2008           
 
Item 1.  Schedule of Investments
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31, 2008
 
   
Shares
    
Cost
    
Market
Value
    
Unrealized
Gain/Loss
    
% of
Net
Assets
  
COMMON STOCKS
                              
Automotive Equipment and Parts
                              
Eagle Industry Co., Ltd.
     380,000     $ 3,921,447     $ 3,368,411     $ (553,036 )     1.6  
  Valves and mechanical seals
                                        
EXEDY Corporation
     83,500       2,223,884       2,216,534       (7,350 )     1.0  
 Drivetrain products
                                        
Futaba Industrial Co., Ltd.
     169,800       4,196,763       4,282,025       85,262       2.1  
 Exhaust system parts
                                        
Total Automotive Equipment and Parts
       10,342,094       9,866,970       (475,124 )     4.7  
                                         
Banks and Finance
                                        
The Hachijuni Bank, Ltd.
     306,000       2,214,334       2,117,747       (96,587 )     1.0  
 General banking services
                                        
Kansai Urban Banking Corporation
     892,000       3,335,098       2,663,823       (671,275 )     1.3  
 General banking services
                                        
The Mie Bank, Ltd.
     399,000       1,985,668       2,201,536       215,868       1.1  
 General banking services
                                        
The Musashino Bank, Ltd.
     63,000       2,504,563       2,908,703       404,140       1.4  
 Regional bank
                                        
Seven Bank, Ltd.†
     1,066       2,002,265       2,021,236       18,971       1.0  
 General banking services
                                        
The Tokyo Tomin Bank, Limited
     131,800       2,836,693       2,786,443       (50,250 )     1.3  
 General banking services
                                        
Total Banks and Finance
       14,878,621       14,699,488       (179,133 )     7.1  
                                         
Chemicals and Pharmaceuticals
                                        
Adeka Corporation
     327,900       3,187,915       2,990,518       (197,397 )     1.4  
 Resin products
                                        
Air Water Inc.
     280,000       2,738,239       3,448,237       709,998       1.7  
 Industrial gases
                                        
Denki Kagaku Kogyo Kabushiki Kaisha
     586,000       2,133,425       2,400,000       266,575       1.2  
 Chemical manufacturer
                                        
Kuraray Co., Ltd.
     400,500       4,815,891       5,053,712       237,821       2.4  
 Synthetic and chemical fibers
                                        
Rohto Pharmaceutical Co., Ltd.
     312,000       3,680,927       3,732,878       51,951       1.8  
 Pharmaceuticals manufacturer
                                        
Total Chemicals and Pharmaceuticals
       16,556,397       17,625,345       1,068,948       8.5  
                                         
Electric
                                        
Mirai Industry Co., Ltd.
     192,300       1,389,054       2,167,659       778,605       1.0  
 Plastic molded electric materials
                                        
Total Electric
       1,389,054       2,167,659       778,605       1.0  
                                         
Electronics
                                        
Daishinku Corp.
     448,000       2,698,840       2,327,493       (371,347 )     1.1  
 Monolithic crystal filters
                                        
Hamamatsu Photonics K.K.
     106,300       3,118,371       3,154,333       35,962       1.5  
 Semiconductors
                                        
Total Electronics
       5,817,211       5,481,826       (335,385 )     2.6  
                                         
Food Manufacturing
                                        
Toyo Suisan Kaisha, Ltd.
     118,000       1,889,052       2,539,439       650,387       1.2  
 Fisheries
                                        
Total Food Manufacturing
       1,889,052       2,539,439       650,387       1.2  
                                         
Information and Software
                                        
Itochu Techno-Solutions Corporation
     56,500       1,994,692       2,067,596       72,904       1.0  
 Computer network systems
                                        
Total Information and Software
       1,994,692       2,067,596       72,904       1.0  
 
2
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31, 2008
 
   
Shares
    
Cost
    
Market
Value
    
Unrealized
Gain/Loss
    
% of
Net
Assets
  
                                         
Iron and Steel                          
Hanwa Co., Ltd.
     693,000     $ 3,101,536     $ 4,401,877     $ 1,300,341       2.1  
 Steel imports/exports
                                        
Neturen Co., Ltd.
     226,400       2,235,484       2,519,848       284,364       1.2  
 Induction hardening equipment
                                        
Osaka Steel Co., Ltd.
     151,600       2,588,729       2,234,907       (353,822 )     1.1  
 Electric furnace steelmaker
                                        
Total Iron and Steel
       7,925,749       9,156,632       1,230,883       4.4  
                                         
Machinery and Machine Tools
                                        
Disco Corporation
     66,100       4,225,337       3,402,759       (822,578 )     1.6  
 Cutting and grinding industrial machinery
                                        
O-M Ltd.
     263,000       1,330,890       2,029,598       698,708       1.0  
 Automatic packaging equipment
                                        
Total Machinery and Machine Tools
       5,556,227       5,432,357       (123,870 )     2.6  
                                         
Miscellaneous Manufacturing
                                        
Mani, Inc.
     29,100       1,279,364       1,972,554       693,190       1.0  
 Medical goods and equipment
                                        
Tokai Rubber Industries, Ltd.
     290,300       4,653,216       3,919,105       (734,111 )     1.8  
 Rubber and plastic products
                                        
Total Miscellaneous Manufacturing
       5,932,580       5,891,659       (40,921 )     2.8  
                                         
Oil and Gas
                                        
AOC Holdings, Inc.
     253,900       3,920,138       3,172,546       (747,592 )     1.5  
 Refines crude oil, natural gas, and minerals
                                        
Total Oil and Gas
       3,920,138       3,172,546       (747,592 )     1.5  
                                         
Real Estate and Warehouse
                                        
Daibiru Corporation
     319,100       3,192,891       3,657,489       464,598       1.8  
 Leases office buildings, apartments and hotels
                                        
Sekisui Chemical Co., Ltd.
     399,000       2,667,094       2,924,033       256,939       1.4  
 Prefabricated residential housing
                                        
Total Real Estate and Warehouse
       5,859,985       6,581,522       721,537       3.2  
                                         
Restaurants
                                        
Hiday Hidaka Corp.
     247,400       2,187,821       2,129,685       (58,136 )     1.0  
 Chinese restaurant chain
                                        
Total Restaurants
       2,187,821       2,129,685       (58,136 )     1.0  
                                         
Retail
                                        
Cawachi Limited
     118,300       3,091,507       3,465,557       374,050       1.7  
 Drug store chain
                                        
Felissimo Corporation
     100,000       2,450,254       2,095,184       (355,070 )     1.0  
 Catalog shopping
                                        
Village Vanguard Co., Ltd.
    483       2,671,178       2,752,019       80,841       1.3  
 Books, cd's, videos and office supplies
                                        
Yaoko Co., Ltd.
     81,100       2,002,259       2,444,994       442,735       1.2  
 Supermarkets
                                        
Total Retail
       10,215,198       10,757,754       542,556       5.2  
                                         
Services
                                        
Fuyo General Lease Co., Ltd.
     78,100       2,259,901       2,317,529       57,628       1.1  
 Machinery Leasing
                                        
Meiko Network Japan Co., Ltd.
     511,100       2,916,082       2,422,734       (493,348 )     1.2  
 Private schools and academic tutoring
                                        
Moshi Moshi Hotline, Inc.
     115,850       3,026,784       2,992,902       (33,882 )     1.4  
 Marketing
                                        
Nissay Dowa General Insurance Company, Limited
     351,000       2,045,780       2,113,055       67,275       1.0  
 Automobile, fire, accident, and marine insurance
                                        
 
3
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31, 2008
 
   
Shares
    
Cost
    
Market
Value
    
Unrealized
Gain/Loss
    
% of
Net
Assets
  
                                         
OBIC Co., Ltd.
     16,690     $ 2,981,627     $ 2,924,073     $ (57,554 )     1.4  
 Computer system integration
                                        
Yahagi Construction Co. Ltd.
     469,000       2,811,960       2,818,980       7,020       1.4  
 General contractor
                                        
Total Services
       16,042,134       15,589,273       (452,861 )     7.5  
                                         
Telecommunications
                                        
Jupiter Telecommunications Co., Ltd.†
     5,990       4,489,401       5,048,455       559,054       2.4  
 Cable television broadcasting
                                        
Total Telecommunications
       4,489,401       5,048,455       559,054       2.4  
                                         
Textiles and Apparel
                                        
Workman Co., Ltd.
     181,900       1,970,079       2,740,227       770,148       1.3  
 Uniforms
                                        
Total Textiles and Apparel
       1,970,079       2,740,227       770,148       1.3  
                                         
Wholesale
                                        
Hitachi High-Technologies Corporation
     103,000       2,152,594       2,343,572       190,978       1.1  
 Electronic components
                                        
Nagase & Company, Ltd.
     205,000       2,630,139       2,454,636       (175,503 )     1.2  
  Dyestuff
                                        
Total Wholesale
       4,782,733       4,798,208       15,475       2.3  
                                         
TOTAL INVESTMENTS IN COMMON STOCKS
     $ 121,749,166     $ 125,746,641     $ 3,997,475       60.3  
                                         
INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED
                                        
Securities Lending Investment Fund, a series of the Brown Brothers Investment Trust
             $ 7,341,663               3.5  
                                         
TOTAL INVESTMENTS
    $ 121,749,166     $ 133,088,304     $ 3,997,475       63.8  
                                         
ASSETS IN EXCESS OF OTHER LIABILITIES, NET
               75,540,615               36.2  
                                         
NET ASSETS
             $ 208,628,919               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 $ 9,776,313.
Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 5,778,838.
 
Portfolio securities and foreign currency holdings were translated at the following exchange rate as of May 31, 2008.
                                         
Japanese Yen
             105.48    
=$1.00
                  
 
4
 
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, as amended, and the Investment Company Act of 1940, as amended, 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:   July 16, 2008  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, 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:   July 16, 2008  
 
 
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