Unassociated Document
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, 2009                                                  

Date of reporting period: March 1, 2009 – May 31, 2009
 

 
Item 1.  Schedule of Investments
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31, 2009

                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain/Loss
    
Assets
  
EQUITY SECURITIES
                              
Automotive Equipment and Parts
                              
Exedy Corporation
     112,200       1,836,416     $ 2,175,552       339,136       1.3  
 Drivetrain products
                                        
Koito Manufacturing Co., Ltd.
     186,000       1,193,337       1,889,876       696,539       1.2  
 Lighting equipments
                                        
Total Automotive Equipment and Parts
       3,029,753       4,065,428       1,035,675       2.5  
                                         
Banks and Finance
                                        
The Aichi Bank, Ltd.
     25,000       2,361,129       1,891,383       (469,746 )     1.1  
 General banking services
                                        
The Chiba Bank, Ltd.
     434,000       2,296,451       2,624,936       328,485       1.6  
 General banking services
                                        
The Musashino Bank, Ltd.
     77,200       2,949,786       2,233,642       (716,144 )     1.4  
 Regional bank
                                        
The San-in Godo Bank, Ltd.
     235,000       2,077,398       1,940,198       (137,200 )     1.2  
 General banking services
                                        
Total Banks and Finance
       9,684,764       8,690,159       (994,605 )     5.3  
                                         
Chemicals and Pharmaceuticals
                                        
Adeka Corporation
     284,000       2,725,162       2,436,875       (288,287 )     1.5  
 Resin products
                                        
Daicel Chemical Industries, Ltd.
     438,000       1,731,341       2,346,633       615,292       1.4  
 Organic/inorganic chemicals
                                        
Lintec Corporation
     114,100       1,788,244       1,866,147       77,903       1.1  
 Adhesive products
                                        
Rohto Pharmaceutical Co., Ltd.
     192,000       2,180,520       1,942,803       (237,717 )     1.2  
 Petrochemical and other chemical products
                                        
Total Chemicals and Pharmaceuticals
       8,425,267       8,592,458       167,191       5.2  
                                         
Electronics
                                        
Shinko Electric Industries Co., Ltd.
     183,500       1,531,402       2,096,814       565,412       1.2  
 Semiconductor packages
                                        
Taiyo Yuden Co., Ltd.
     296,000       2,249,878       3,069,492       819,614       1.9  
 Electronic components
                                        
Total Electronics
       3,781,280       5,166,306       1,385,026       3.1  
                                         
Food Manufacturing
                                        
Doutor Nichires Holdings Co., Ltd.
     121,100       2,077,173       1,648,628       (428,545 )     1.0  
 Coffee and restaurant chain
                                        
Total Food Manufacturing
       2,077,173       1,648,628       (428,545 )     1.0  
                                         
Information and Software
                                        
Fujitsu Business Systems Ltd.
     96,900       1,443,226       1,744,028       300,802       1.1  
 Business systems network
                                        
Total Information and Software
       1,443,226       1,744,028       300,802       1.1  
                                         
Iron and Steel
                                        
Hanwa Co., Ltd.
     541,000       2,320,391       2,247,444       (72,947 )     1.4  
 Steel imports/exports
                                        
Hitachi Metals Ltd.
     237,000       1,281,741       2,219,589       937,848       1.3  
 Specialty steel and metal
                                        
Neturen Co., Ltd.
     249,500       2,395,976       2,025,972       (370,004 )     1.2  
 Induction hardening equipment
                                        
Yamato Kogyo Co., Ltd.
     64,700       2,627,331       1,729,802       (897,529 )     1.1  
 Railroad related products
                                        
Total Iron and Steel
       8,625,439       8,222,807       (402,632 )     5.0  
                                         
Machinery and Machine Tools
                                        
Mimasu Semiconductor Industry Co., Ltd.
     153,200       1,676,686       1,785,850       109,164       1.1  
 Silicon and gallium
                                        
Total Machinery and Machine Tools
       1,676,686       1,785,850       109,164       1.1  
                                         
Miscellaneous Manufacturing
                                        
Kansai Paint Co., Ltd.
     265,000       1,453,754       1,663,789       210,035       1.0  
 Paint
                                        
The Yokohama Rubber Company Limited
     394,000       1,572,437       1,772,825       200,388       1.1  
 Rubber products
                                        
Total Miscellaneous Manufacturing
       3,026,191       3,436,614       410,423       2.1  
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain/Loss
    
Assets
  
Oil and Gas
                              
Cosmo Oil Company, Limited
     455,000     $ 1,223,563     $ 1,647,360     $ 423,797       1.0  
 Crude oil refiner and distributor
                                        
Total Oil and Gas
       1,223,563       1,647,360       423,797       1.0  
                                         
Real Estate and Warehouse
                                        
Daibiru Corporation
     362,700       3,591,766       3,036,258       (555,508 )     1.8  
 Leases office buildings, apartments and hotels
                                        
Sekisui Chemical Co., Ltd.
     289,000       1,906,783       1,753,989       (152,794 )     1.1  
 Prefabricated residential housing
                                        
Total Real Estate and Warehouse
       5,498,549       4,790,247       (708,302 )     2.9  
                                         
Restaurants
                                        
Hiday Hidaka Corp
     175,200       1,597,444       1,858,973       261,529       1.1  
 Chinese restaurant chain
                                        
Total Restaurants
       1,597,444       1,858,973       261,529       1.1  
                                         
Retail
                                        
Shimachu Co., Ltd.
     100,700       2,381,120       2,004,200       (376,920 )     1.2  
 Furniture store chain
                                        
Total Retail
       2,381,120       2,004,200       (376,920 )     1.2  
                                         
Services
                                        
Fuyo General Lease Co., Ltd.
     146,500       3,367,685       3,001,591       (366,094 )     1.8  
 Machinery Leasing
                                        
Meiko Network Japan Co., Ltd.
     463,100       2,668,274       2,224,276       (443,998 )     1.4  
 Private schools and academic tutoring
                                        
Moshi Moshi Hotline, Inc.
     177,750       4,316,374       3,238,244       (1,078,130 )     2.0  
 Marketing
                                        
NEC Networks & System Integration Corporation
     156,000       1,932,895       1,707,487       (225,408 )     1.0  
 Communication systems
                                        
Nissay Dowa General Insurance Company, Limited
     504,000       2,422,591       2,341,610       (80,981 )     1.4  
 Automobile, fire, accident, and marine insurance
                                        
Rakuten, Inc.
     4,246       2,409,571       2,323,715       (85,856 )     1.4  
 Manages consumer websites
                                        
Total Services
       17,117,390       14,836,923       (2,280,467 )     9.0  
                                         
Transportation
                                        
Nippon Express Co., Ltd.
     385,000       1,522,830       1,623,555       100,725       1.0  
 Freight
                                        
Seino Holdings Co., Ltd.
     255,000       1,332,572       1,678,386       345,814       1.0  
 Comprehensive services
                                        
Total Transportation
       2,855,402       3,301,941       446,539       2.0  
                                         
Wholesale
                                        
Hitachi High-Technologies Corporation
     155,200       3,057,513       2,384,069       (673,444 )     1.4  
 Electronic components
                                        
Total Wholesale
       3,057,513       2,384,069       (673,444 )     1.4  
                                         
TOTAL INVESTMENTS IN EQUITY SECURITIES
     $ 75,500,760     $ 74,175,991     $ (1,324,769 )     45.0  
                                         
INVESTMENTS IN FOREIGN CURRENCY
                                        
Hong Kong Shanghai Bank- Tokyo
                                        
  Non- interest bearing account
  
JPY 195,325,091
     $ 2,043,898     $ 2,043,898     $ 0       1.2  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
       2,043,898       2,043,898       0       1.2  
                                         
TOTAL INVESTMENTS
     $ 77,544,658     $ 76,219,889     $ (1,324,769 )     46.2  
                                         
OTHER ASSETS LESS LIABILITIES, NET
       88,809,561               53.8  
                                         
NET ASSETS
     $ 165,029,450               100.0  
 
 
* Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $ 6,332,483.
Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 7,657,252.
 
 
Portfolio securities and foreign currency holdings were translated at the following exchange rate as of May 31, 2009.
 
 
Japanese Yen     95.565     =$1.00
 
 
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.
 
 
 
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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:  July 28, 2009


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:   July 28, 2009
 
 
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Exhibit (a)
 
Japan Smaller Capitalization Fund, Inc.
 
Two World Financial Center, Building B
New York, New York 10281
Telephone       
(800) 833-0018
 
CERTIFICATIONS
 
I, Shigeru Shinohara, certify that:
 
1.  
I have reviewed this report on Form N-Q of Japan Smaller Capitalization Fund, Inc. (the “registrant”);
 
2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  
Based on my knowledge, the schedule of investments in this report fairly presents in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
 
4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
 
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
 
 
 
 
 
 
 
 
 
1
 

 
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
     
 
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: July 28, 2009
/s/ Shigeru Shinohara
 
Shigeru Shinohara
President
 
 
 
2
 

 
Exhibit (a)
 
Japan Smaller Capitalization Fund, Inc.
 
Two World Financial Center, Building B
New York, New York 10281
 
Telephone      
(800) 833-0018
 
CERTIFICATIONS
 
I, Rita Chopra-Brathwaite, certify that:
 
1.  
I have reviewed this report on Form N-Q of Japan Smaller Capitalization Fund, Inc. (the “registrant”);
 
2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  
Based on my knowledge, the schedule of investments in this report fairly presents in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
 
4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
 
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
     
 
 

 
3
 
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.  
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
     
 
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: July 28, 2009
/s/ Rita Chopra-Brathwaite
 
Rita Chopra-Brathwaite
Treasurer
 

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