efc10-473_fmnq.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, 2011                                

Date of reporting period:  March 1, 2010 –  May 31,  2010

 
 
 
 
Item 1.  Schedule of Investments.
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31,  2010
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain/Loss
    
Assets
  
COMMON STOCKS
                              
Automotive Equipment and Parts
                              
Exedy Corporation
    82,000     $ 1,080,211     $ 2,027,991     $ 947,780       1.1  
 Drivetrain products
                                        
Keihin Corporation
     119,300       1,625,586       2,191,184       565,598       1.2  
 Automotive and machinery parts
                                        
Total Automotive Equipment and Parts
       2,705,797       4,219,175       1,513,378       2.3  
                                         
Banks and Finance
                                        
The Aichi Bank, Ltd.
     27,500       2,558,514       1,723,008       (835,506 )     1.0  
 General banking services
                                        
The Keiyo Bank, Ltd.
     369,000       1,781,156       1,775,621       (5,535 )     1.0  
 General banking services
                                        
The San-in Godo Bank, Ltd.
     268,000       2,302,964       1,891,626       (411,338 )     1.1  
 General banking services
                                        
Total Banks and Finance
       6,642,634       5,390,255       (1,252,379 )     3.1  
                                         
Chemicals and Pharmaceuticals
                                        
Adeka Corporation
     212,300       2,012,697       1,968,360       (44,337 )     1.1  
 Resin products
                                        
Daicel Chemical Industries, Ltd.
     540,000       2,546,690       3,728,239       1,181,549       2.1  
 Organic/inorganic chemicals
                                        
Hitachi Chemical Company, Ltd.
     170,800       3,232,629       3,347,729       115,100       1.9  
 Semiconductor materials
                                        
Lintec Corporation
     142,300       2,463,372       2,547,815       84,443       1.4  
 Adhesive products
                                        
Miraca Holdings Inc.
     80,500       2,175,417       2,372,939       197,522       1.3  
 Medical drugs and equipment
                                        
Rohto Pharmaceutical Co., Ltd.
     214,000       2,427,766       2,415,350       (12,416 )     1.3  
 Pharmaceuticals manufacturer
                                        
Total Chemicals and Pharmaceuticals
       14,858,571       16,380,432       1,521,861       9.1  
                                         
Electronics
                                        
Fuji Machine Mfg. Co., Ltd.
     115,200       1,640,376       1,978,880       338,504       1.1  
 Automated assembly machines
                                        
Sanshin Electronics Co., Ltd.
     225,300       2,575,850       1,912,749       (663,101 )     1.1  
 Semiconductors
                                        
Shinko Electric Industries Co., Ltd.
     125,200       1,531,668       1,825,302       293,634       1.0  
 Semiconductor packages
                                        
Yaskawa Electric Corporation
     389,000       2,505,715       3,062,655       556,940       1.7  
 Servomotors and industrial robots
                                        
Total Electronics
       8,253,609       8,779,586       525,977       4.9  
                                         
Food Manufacturing
                                        
Fuji Oil Co., Ltd.
     163,600       2,110,297       2,177,971       67,674       1.2  
 Mushrooms
                                        
                                         
Information and Software
                                        
Otsuka Corporation
     38,700       2,258,478       2,518,494       260,016       1.4  
Computer information system developer
                                        
                                         
Iron and Steel
                                        
Hanwa Co., Ltd.
     535,000       2,170,770       2,097,231       (73,539 )     1.2  
 Steel imports/exports
                                        
Neturen Co., Ltd.
     268,700       2,414,450       1,866,979       (547,471 )     1.0  
 Induction hardening equipment
                                        
Total Iron and Steel
       4,585,220       3,964,210       (621,010 )     2.2  
                                         
Machinery and Machine Tools
                                        
Mimasu Semiconductor Industry Co., Ltd.
     149,200       1,638,044       1,882,764       244,720       1.0  
 Silicon and gallium
                                        
Misumi Group Inc.
     130,900       2,022,132       2,454,690       432,558       1.3  
 Precision machinery parts
                                        
Total Machinery and Machine Tools
       3,660,176       4,337,454       677,278       2.3  
 
 

 
 
2
 
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31,  2010
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain/Loss
    
Assets
  
Miscellaneous Manufacturing
                              
Horiba, Ltd.
     61,700     $ 1,433,883     $ 1,706,661     $ 272,778       1.0  
 Measuring instruments and analyzers
                                        
Kansai Paint Co., Ltd.
    361,000       2,249,025       2,925,684       676,659       1.6  
 Paint
                                        
Nihon Kohden Corporation
     136,500       2,000,240       2,700,991       700,751       1.5  
 Medical equipment
                                        
Nitta Corporation
     122,600       1,797,265       1,968,296       171,031       1.1  
 Processed rubber products
                                        
Total Miscellaneous Manufacturing
       7,480,413       9,301,632       1,821,219       5.2  
                                         
Real Estate and Warehouse
                                        
Daibiru Corporation
     306,800       3,171,272       2,483,048       (688,224 )     1.4  
 Leases office buildings, apartments and hotels
                                        
Sekisui Chemical Co., Ltd.
    526,000       3,539,817       3,260,893       (278,924 )     1.8  
 Prefabricated residential housing
                                        
Sumitomo Real Estate Sales Co., Ltd.
    57,920       2,223,834       2,649,976       426,142       1.5  
 Brokerage Services
                                        
Total Real Estate and Warehouse
       8,934,923       8,393,917       (541,006 )     4.7  
                                         
Retail
                                        
Don Quijote Co., Ltd.
    76,800       1,923,852       1,991,565       67,713       1.1  
 Discount stores
                                        
Heiwado Co., Ltd.
    152,400       1,911,404       1,892,938       (18,466 )     1.1  
 Supermarkets
                                        
Shimachu Co., Ltd.
    103,200       2,432,871       1,942,067       (490,804 )     1.1  
 Furniture store chain
                                        
Xebio Co., Ltd.
    108,400       2,181,451       2,023,212       (158,239 )     1.1  
 Sporting goods
                                        
Total Retail
       8,449,578       7,849,782       (599,796 )     4.4  
                                         
Services
                                        
Daiseki Co., Ltd.
    99,000       2,058,615       2,004,746       (53,869 )     1.1  
 Waste disposal
                                        
Fuyo General Lease Co., Ltd.
    110,900       2,072,318       2,879,504       807,186       1.6  
 Machinery Leasing
                                        
NEC Networks & System Integration Corporation
     192,100       2,377,054       2,354,317       (22,737 )     1.3  
 Communication systems
                                        
Yahoo Japan Corporation
     5,480       2,073,490       1,927,941       (145,549 )     1.1  
 Internet
                                        
Total Services
       8,581,477       9,166,508       585,031       5.1  
                                         
Telecommunications
                                        
Hitachi Kokusai Electric Inc.
    232,000       1,835,498       2,156,120       320,622       1.2  
 Wireless communication equipment
                                        
                                         
Textiles and Apparel
                                        
ABC-Mart, Inc.
    87,200       2,990,807       3,019,810       29,003       1.7  
 Shoes
                                        
                                         
Transportation
                                        
Kintetsu World Express Inc.
    133,900       3,060,254       3,206,877       146,623       1.8  
 Distribution services
                                        
Seino Holdings Co., Ltd.
     248,000       1,457,038       1,725,882       268,844       1.0  
 Comprehensive services
                                        
Senko Co., Ltd.
    474,000       1,658,462       1,931,179       272,717       1.0  
 Trucking and warehousing
                                        
Total Transportation
       6,175,754       6,863,938       688,184       3.8  
                                         
TOTAL INVESTMENTS IN COMMON STOCKS
     $ 89,523,232     $ 94,519,284     $ 4,996,052       52.6  
                                         
 
 
 
3
 
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
May 31,  2010
 

 
                       
% of
  
           
Market
    
Unrealized
    
Net
  
 
Principal
  
Cost
    
Value
    
Gain/Loss
    
Assets
  
INVESTMENTS IN FOREIGN CURRENCY
                          
Hong Kong Shanghai Bank- Tokyo
                          
  Non- interest bearing account
JPY 79,930,708
   $ 885,366     $ 880,149     $ (5,217 )     0.4  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
    885,366       880,149       (5,217 )     0.4  
                                   
TOTAL INVESTMENTS
  $ 90,408,598     $ 95,399,433     $ 4,990,835       53.0  
                                   
OTHER ASSETS LESS LIABILITIES, NET
       84,423,566               47.0  
                                   
              $ 179,822,999               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 $ 9,446,107.
   Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 4,455,272.
 
 
 Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of May 31, 2010.
       
       
   Japanese Yen   90.815         =$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 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 19, 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:   July 19, 2010
 
 
 
 
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