efc11-20_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:  September 1, 2010  –  November 30,  2010

 
 

 
 
Item 1.  Schedule of Investments.
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
 
SCHEDULE OF INVESTMENTS
 
IN SECURITIES OF UNAFFILIATED ISSUERS
 
November 30, 2010
 
 
                           
% of
 
               
Market
   
Unrealized
   
Net
 
   
Shares
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
COMMON STOCKS
                             
Automotive Equipment and Parts
                             
Hino Motors, Ltd
    405,000     $ 1,332,426     $ 2,001,735     $ 669,309       1.1  
 Diesel buses and trucks
                                       
Musashi Seimitsu Industry Co., Ltd
    80,900       1,319,584       1,993,455       673,871       1.1  
 Ball joints, camshafts, and gears
                                       
Nissin Kogyo Co., Ltd
    104,000       1,440,794       1,771,087       330,293       1.0  
 Brake systems
                                       
Total Automotive Equipment and Parts
      4,092,804       5,766,277       1,673,473       3.1  
                                         
Banks and Finance
                                       
The Aichi Bank, Ltd
    32,000       2,836,496       1,843,944       (992,552 )     1.0  
 General banking services
                                       
The Keiyo Bank, Ltd
    395,000       1,895,424       1,853,040       (42,384 )     1.0  
 General banking services
                                       
The San-in Godo Bank, Ltd
    268,000       2,302,964       1,773,624       (529,340 )     1.0  
 General banking services
                                       
Total Banks and Finance
      7,034,884       5,470,608       (1,564,276 )     3.0  
                                         
Chemicals and Pharmaceuticals
                                       
Daicel Chemical Industries, Ltd
    330,000       1,690,713       2,251,077       560,364       1.2  
 Organic/inorganic chemicals
                                       
Hitachi Chemical Company, Ltd
    208,400       3,874,052       3,868,219       (5,833 )     2.1  
 Semiconductor materials
                                       
Miraca Holdings Inc
    62,100       1,811,979       2,208,727       396,748       1.2  
 Medical drugs and equipment
                                       
Rohto Pharmaceutical Co., Ltd
    189,000       2,100,041       2,074,114       (25,927 )     1.1  
 Pharmaceuticals manufacturer
                                       
Sawai Pharmaceutical Co., Ltd
    20,400       1,479,822       1,745,572       265,750       1.0  
 Prescription and generic drugs
                                       
Total Chemicals and Pharmaceuticals
      10,956,607       12,147,709       1,191,102       6.6  
                                         
Electronics
                                       
Funai Electric Co., Ltd
    62,200       1,843,165       2,117,003       273,838       1.2  
 Audio-visual equipment
                                       
Fuji Machine Mfg. Co., Ltd
    135,700       1,975,399       2,322,295       346,896       1.2  
 Automated assembly machines
                                       
Sanshin Electronics Co., Ltd
    225,300       2,575,850       1,760,662       (815,188 )     1.0  
 Semiconductors
                                       
Yaskawa Electric Corporation
    389,000       2,505,715       3,375,120       869,405       1.8  
 Servomotors and industrial robots
                                       
Total Electronics
      8,900,129       9,575,080       674,951       5.2  
                                         
Food Manufacturing
                                       
Fuji Oil Co., Ltd
    172,600       2,233,847       2,346,501       112,654       1.2  
 Mushrooms
                                       
                                         
Information and Software
                                       
 Network solutions
                                       
Itochu Techno-Solutions Corporation
    137,900       4,556,529       4,975,688       419,159       2.7  
 Computer network systems developer
                                       
Otsuka Corporation
    85,000       5,266,843       5,523,576       256,733       3.0  
Computer information system developer
                                       
Total Information and Software
      9,823,372       10,499,264       675,892       5.7  
                                         
Iron and Steel
                                       
Hanwa Co., Ltd
    480,000       1,878,958       1,826,711       (52,247 )     1.0  
 Steel imports/exports
                                       
Neturen Co., Ltd
    263,300       2,359,421       1,963,091       (396,330 )     1.1  
 Induction hardening equipment
                                       
Total Iron and Steel
      4,238,379       3,789,802       (448,577 )     2.1  
                                         
 
 
 
 
2

 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
 
SCHEDULE OF INVESTMENTS
 
IN SECURITIES OF UNAFFILIATED ISSUERS
 
November 30, 2010
 
 
                                   
% of
 
                   
Market
   
Unrealized
   
Net
 
   
Shares
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
Machinery and Machine Tools
                                       
Misumi Group Inc
    108,900     $ 1,788,605     $ 2,468,365     $ 679,760       1.2  
 Precision machinery parts
                                       
                                         
Miscellaneous Manufacturing
                                       
Daiichikosho Co., Ltd
    99,300       1,503,554       1,765,914       262,360       1.0  
 Karaoke equipment
                                       
Kansai Paint Co., Ltd
    191,000       1,304,979       1,748,624       443,645       1.0  
 Paint
                                       
Nihon Kohden Corporation
    136,600       2,002,201       2,654,840       652,639       1.3  
 Medical equipment
                                       
Toyo Tanso Co., Ltd
    33,900       1,762,036       1,852,005       89,969       1.0  
 Carbon and graphite
                                       
Total Miscellaneous Manufacturing
      6,572,770       8,021,383       1,448,613       4.3  
                                         
Real Estate and Warehouse
                                       
Sekisui Chemical Co., Ltd
    382,000       2,572,912       2,628,650       55,738       1.5  
 Prefabricated residential housing
                                       
Sumitomo Real Estate Sales Co., Ltd
    52,050       2,005,965       2,261,148       255,183       1.2  
 Brokerage Services
                                       
Total Real Estate and Warehouse
      4,578,877       4,889,798       310,921       2.7  
                                         
Retail
                                       
Don Quijote Co., Ltd
    86,800       2,196,564       2,508,641       312,077       1.4  
 Discount stores
                                       
Heiwado Co., Ltd
    152,400       1,911,404       1,838,430       (72,974 )     1.0  
 Supermarkets
                                       
Xebio Co., Ltd
    108,400       2,181,451       2,189,794       8,343       1.1  
 Sporting goods
                                       
Total Retail
      6,289,419       6,536,865       247,446       3.5  
                                         
Services
                                       
Daiseki Co., Ltd
    99,000       2,058,615       1,861,285       (197,330 )     1.0  
 Waste disposal
                                       
Fuyo General Lease Co., Ltd
    73,200       1,300,738       2,152,374       851,636       1.1  
 Machinery Leasing
                                       
NEC Networks & System Integration Corporation
    203,600       2,520,282       2,404,897       (115,385 )     1.3  
 Communication systems
                                       
Park24 Co., Ltd
    357,800       3,776,362       3,425,562       (350,800 )     1.9  
 Parking garages
                                       
Total Services
      9,655,997       9,844,118       188,121       5.3  
                                         
Telecommunications
                                       
Hitachi Kokusai Electric Inc
    232,000       1,835,498       2,126,759       291,261       1.2  
 Wireless communication equipment
                                       
                                         
Textiles and Apparel
                                       
ABC-Mart, Inc
    79,400       2,745,414       2,695,761       (49,653 )     1.5  
 Shoes
                                       
                                         
Transportation
                                       
Kintetsu World Express Inc
    75,700       1,854,681       1,937,797       83,116       1.1  
 Distribution services
                                       
Senko Co., Ltd
    649,000       2,215,169       1,871,817       (343,352 )     1.0  
 Trucking and warehousing
                                       
Total Transportation
      4,069,850       3,809,614       (260,236 )     2.1  
                                         
TOTAL INVESTMENTS IN COMMON STOCKS
    $ 84,816,452     $ 89,987,904     $ 5,171,452       48.7  
                                         
 
 
 
 
 
3

 
 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
 
SCHEDULE OF INVESTMENTS
 
IN SECURITIES OF UNAFFILIATED ISSUERS
 
November 30, 2010
 
 
                                   
% of
 
                   
Market
   
Unrealized
   
Net
 
   
Principal
   
Cost
   
Value
   
Gain/Loss
   
Assets
 
INVESTMENTS IN FOREIGN CURRENCY
                                       
Mizuho Corporate Bank, Ltd.
                                       
  Non- interest bearing account
 
JPY 105,669,116
    $ 1,252,966     $ 1,264,590     $ 11,624       0.7  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
      1,252,966       1,264,590       11,624       0.7  
                                         
TOTAL INVESTMENTS
    $ 86,069,418     $ 91,252,494     $ 5,183,076       49.4  
                                         
OTHER ASSETS LESS LIABILITIES, NET
      93,371,116               50.6  
                                         
                    $ 184,623,610               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 $9,172,371.
         
Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 3,989,295.
         
                                         
                                         
Portfolio securities and foreign currency holdings were translated at the
 
following exchange rate as of November 30, 2010.
 
                                         
Japanese Yen
      83.560    
=$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.
 
 
 
 
 
 

 
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 14, 2011


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 14, 2011
 
 
 
 
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