efc8-0002_formnq.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:                                   811-5992                                

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 28, 2008                                           

Date of reporting period:          June 1, 2007 – November 30, 2007

Item 1.  Schedule of Investments
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2007
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain/Loss
    
Assets
  
COMMON STOCKS
                              
Automotive Equipment and Parts
                              
Eagle Industry Co., Ltd.
     380,000     $ 3,921,447     $ 5,382,863     $ 1,461,416       2.4  
  Valves and mechanical seals
                                        
EXEDY Corporation 
    116,900       3,015,073       4,010,888       995,815       1.8  
 Drivetrain products
                                        
Futaba Industrial Co., Ltd.
     286,700       6,729,587       7,771,327       1,041,740       3.5  
 Exhaust system parts
                                        
Koito Manufacturing Co., Ltd.
     239,000       2,829,073       3,224,116       395,043       1.4  
 Lighting equipment
                                        
Nittan Valve Co., Ltd.
     344,800       2,948,998       2,170,428       (778,570 )     1.0  
 Engine valves
                                        
Tokai Rika Co., Ltd.
     118,300       2,916,030       3,558,215       642,185       1.5  
 Electronic parts
                                        
Total Automotive Equipment and Parts
       22,360,208       26,117,837       3,757,629       11.6  
                                         
Banks and Finance
                                        
The Hachijuni Bank, Ltd.
     348,000       2,588,690       2,748,399       159,709       1.2  
 General banking services
                                        
Kansai Urban Banking Corporation
     1,391,000       5,424,691       4,709,946       (714,745 )     2.1  
 General banking services
                                        
The San-in Godo Bank, Ltd.
     248,000       2,295,820       2,264,595       (31,225 )     1.0  
 General banking services
                                        
Total Banks and Finance
       10,309,201       9,722,940       (586,261 )     4.3  
                                         
Chemicals and Pharmaceuticals
                                        
Hisamitsu Pharmaceutical Co., Inc.
     157,000       4,364,712       4,736,368       371,656       2.1  
 Salonpas brand pharmaceuticals
                                        
Taiyo Ink Mfg.Co., Ltd.
     82,400       2,233,460       2,515,521       282,061       1.1  
 Resist inks for printed circuit boards
                                        
Total Chemicals and Pharmaceuticals
       6,598,172       7,251,889       653,717       3.2  
                                         
Electric
                                        
Mirai Co., Ltd.
     271,300     $ 2,598,198     $ 3,078,374     $ 480,176       1.4  
 Plastic molded electric materials
                                        
Total Electric
             2,598,198       3,078,374       480,176       1.4  
                                         
Electronics
                                        
Daishinku Corp.
     435,000       2,632,167       2,507,092       (125,075 )     1.1  
 Monolithic crystal filters
                                        
Sanshin Electronics Co., Ltd.
     169,300       2,162,564       2,245,746       83,182       1.0  
 Semiconductors
                                        
Total Electronics
             4,794,731       4,752,838       (41,893 )     2.1  
                                         
Food Manufacturing
                                        
Ozeki Co., Ltd.
     99,400       2,617,479       2,810,716       193,237       1.2  
 Supermarket chain
                                        
Total Food Manufacturing
             2,617,479       2,810,716       193,237       1.2  
                                         
Information and Software
                                        
Daiwabo Information System Co., Ltd.
     199,500       2,685,937       2,834,986       149,049       1.3  
 Information system and software
                                        
Sorun Corporation
     404,400       3,325,037       2,250,612       (1,074,425 )     1.0  
 Computer software development
                                        
SRA Holdings Inc.
     231,000       3,004,099       3,910,847       906,748       1.7  
 Business application software
                                        
Total Information and Software
       9,015,073       8,996,445       (18,628 )     4.0  
                                         
Machinery and Machine Tools
                                        
Disco Corporation
     73,800       4,679,353       4,339,808       (339,545 )     1.9  
 Cutting and grinding industrial machinery
                                        

 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2007
 
                 
% of
         
Market
  
Unrealized
  
Net
 
Shares
  
Cost
  
Value
  
Gain/Loss
  
Assets
                   
Hitachi Construction Machinery Co., Ltd.
81,100
  
2,072,643
  
2,899,428
  
826,785
  
1.2
 Construction machinery
                  
O-M Ltd.
265,000
  
1,340,201
  
2,625,062
  
1,284,861
  
1.2
  Automatic packaging equipment
                  
Yamatake Corporation
78,700
  
1,948,938
  
2,218,299
  
269,361
  
1.0
 Industrial automation equipment
                  
Yuken Kogyo Co., Ltd.
626,000
  
2,226,520
  
2,147,832
  
(78,688)
  
1.0
  Hydraulic equipment
                  
Total Machinery and Machine Tools
  
12,267,655
  
14,230,429
  
1,962,774
  
6.3
                   
Miscellaneous Manufacturing
                  
Dowa Holdings, Co., Ltd.
346,000
  
3,392,928
  
2,414,787
  
(978,141)
  
1.0
  Various metal-related products
                  
Furuno Electric Co., Ltd.
139,600
  
1,870,703
  
2,174,866
  
304,163
  
1.0
 Marine equipment
                  
Sanyo Special Steel Co., Ltd.
453,000
  
3,185,546
  
3,145,238
  
(40,308)
  
1.4
  Specialty steel products
                  
Tokai Rubber Industries, Ltd.
380,200
  
6,013,675
  
6,265,622
  
251,947
  
2.8
 Rubber and plastic products
                  
Total Miscellaneous Manufacturing
  
14,462,852
  
14,000,513
  
(462,339)
  
6.2
                   
Oil and Gas
                  
AOC Holdings, Inc.
253,900
  
3,920,138
  
4,088,191
  
168,053
  
1.8
 Refines crude oil, natural gas, and minerals
                  
Total Oil and Gas
    
3,920,138
  
4,088,191
  
168,053
  
1.8
                   
Real Estate and Warehouse
                  
Daibiru Corporation
314,400
  
3,139,610
  
4,077,050
  
937,440
  
1.8
 Leases office buildings, apartments and hotels
                  
Suruga Corporation
253,800
  
5,703,228
  
4,799,676
  
(903,552)
  
2.1
 Multi-unit commercial and residential building
                  
Total Real Estate and Warehouse
    
8,842,838
  
8,876,726
  
33,888
  
3.9
                   
Restaurants
                  
Hiday Hidaka Corp.
223,500
  
$1,994,143
  
$2,360,894
  
$366,751
  
1.1
 Chinese restaurant chain
                  
Total Restaurants
    
1,994,143
  
2,360,894
  
366,751
  
1.1
                   
Retail
                  
Nishimatsuya Chain Co., Ltd.
160,500
  
2,007,569
  
2,251,871
  
244,302
  
1.0
 Apparel chain
                  
Shimamura Co., Ltd.
40,800
  
3,930,038
  
4,166,527
  
236,489
  
1.9
 Clothing chain
                  
Village Vanguard Co., Ltd.
452
  
2,484,059
  
2,454,464
  
(29,595)
  
1.1
 Books, cd's, videos and office supplies
                  
Yaoko Co., Ltd.
84,400
  
2,043,108
  
2,500,572
  
457,464
  
1.1
 Supermarkets
                  
Total Retail
    
10,464,774
  
11,373,434
  
908,660
  
5.1
                   
Services
                  
Aeon Delight Co., Ltd.
326,400
  
3,660,779
  
6,775,199
  
3,114,420
  
3.0
 Building management
                  
Meiko Network Japan Co., Ltd.
537,300
  
3,056,165
  
3,232,171
  
176,006
  
1.4
 Private schools and academic tutoring
                  
Nippo Corporation 
362,000
  
2,842,972
  
2,588,392
  
(254,580)
  
1.2
 Heavy construction
                  
Yahagi Construction Co. Ltd.
540,000
  
3,175,552
  
2,232,068
  
(943,484)
  
1.0
 General contractor
                  
Total Services
    
12,735,468
  
14,827,830
  
2,092,362
  
6.6
                   
 
 

 
2
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2007
 
                 
% of
         
Market
  
Unrealized
  
Net
 
Shares
  
Cost
  
Value
  
Gain/Loss
  
Assets
                   
Telecommunications
                  
Jupiter Telecommunications Co., Ltd.† 
8,565
  
6,507,035
  
6,903,215
  
396,180
  
3.1
 Cable television broadcasting
                  
Total Telecommunications
    
6,507,035
  
6,903,215
  
396,180
  
3.1
                   
Textiles and Apparel
                  
Workman Co., Ltd.
181,900
  
1,970,079
  
3,423,576
  
1,453,497
  
1.5
 Uniforms
                  
Total Textiles and Apparel
    
1,970,079
  
3,423,576
  
1,453,497
  
1.5
                   
Wholesale
                  
Nagase & Company, Ltd.
318,000
  
4,037,450
  
3,579,630
  
(457,820)
  
1.6
  Dyestuff
                  
Total Wholesale
  
4,037,450
  
3,579,630
  
(457,820)
  
1.6
                   
TOTAL INVESTMENTS IN COMMON STOCKS
  
$135,495,494
  
$146,395,477
  
$10,899,983
  
65.0
                   
TOTAL INVESTMENTS 
  
$135,495,494
  
$146,395,477
  
$10,899,983
  
65.0
                   
OTHER ASSETS LESS LIABILITIES, NET
  
78,743,182
      
35.0
                   
NET ASSETS
      
$225,138,659
      
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 $ 17,649,736.
  Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 6,749,753.
    
                   
 
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of November 30, 2007.
 
Japanese Yen
    
 111.05
  
 =$1.00
        
 
                
 
                  
                   
 
    
 
          
 
 
 
3

 
Item 2.  Controls and Procedures.

(a)  The Registrant’s Principal Executive Officer and Principal Financial Officerevaluated 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.

 

4


 
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 7, 2008


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 7, 2008