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  
 
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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.
 
 
 
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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:  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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