Edgar Filing: JAPAN SMALLER CAPITALIZATION FUND INC

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

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

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

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