efc12-582_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)

Masashi Terachi
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, 2013                                

Date of reporting period:  March 1, 2012  –  May 31, 2012

 
 
 
 
 
Item 1.  Schedule of Investments.
JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
May 31, 2012
  
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
JAPANESE COMOMON STOCKS
                              
Automotive Equipment and Parts
                              
Musashi Seimitsu Industry Co., Ltd.
     247,800     $ 5,711,130     $ 4,827,169     $ (883,961 )     2.0  
 Ball joints, camshafts, and gears
                                        
Press Kogyo Co Ltd
     459,000       2,112,458       2,274,918       162,460       1.0  
 Chassis frames, axles, and suspensions
                                        
Total Automotive Equipment and Parts
       7,823,588       7,102,087       (721,501 )     3.0  
                                         
Banks and Finance
                                        
Fuyo General Lease Co., Ltd.
     172,600       4,852,806       5,064,344       211,538       2.1  
 Machinery leasing
                                        
Total Banks and Finance
       4,852,806       5,064,344       211,538       2.1  
                                         
Chemicals and Pharmaceuticals
                                        
Adeka Corporation
     689,900       6,625,819       5,816,363       (809,456 )     2.5  
 Resin products
                                        
Central Glass Co., Ltd.
     1,180,000       5,280,117       4,748,036       (532,081 )     2.0  
 Glass and Chemicals
                                        
Rohto Pharmaceutical Co., Ltd.
     360,000       4,054,178       4,258,287       204,109       1.8  
 Pharmaceuticals manufacturer
                                        
Total Chemicals and Pharmaceuticals
       15,960,114       14,822,686       (1,137,428 )     6.3  
                                         
Electronics
                                        
Alpine Electronics, Inc.
     465,800       5,915,700       5,051,596       (864,104 )     2.1  
 Car audio and navigation systems
                                        
Fuji Machine Mfg. Co., Ltd.
     243,700       4,118,509       4,476,472       357,963       1.9  
 Automated assembly machines
                                        
Fujitsu General Limited
     320,000       1,803,186       2,477,103       673,917       1.0  
 Air conditioners
                                        
Funai Electric Co., Ltd.
     165,900       3,929,352       2,314,144       (1,615,208 )     1.0  
 Audio-visual equipment
                                        
MegaChips Corporation
     114,200       1,674,948       2,514,924       839,976       1.1  
 Large-Scale-Integration circuits
                                        
Nippon Chemi-Con Corporation
     1,236,000       6,788,223       3,678,712       (3,109,511 )     1.6  
 Electronic components and circuit products
                                        
Sato Corporation
     285,700       3,422,824       3,813,713       390,889       1.6  
 Automation recognition systems
                                        
Siix Corporation
     294,100       3,953,241       3,704,191       (249,050 )     1.6  
 Video, audio, and office equipment
                                        
Total Electronics
       31,605,983       28,030,855       (3,575,128 )     11.9  
                                         
Information and Software
                                        
DTS Corporation
     269,300       3,350,041       3,374,635       24,594       1.4  
Information technology services
                                        
Itochu Techno-Solutions Corporation
     69,800       2,333,690       3,236,559       902,869       1.4  
 Computer network systems developer
                                        
Kadokawa Group Holdings, Inc.
     146,400       4,837,471       3,622,364       (1,215,107 )     1.5  
 Publishing, movie/visual, and internet-related businesses
                                        
Otsuka Corporation
     89,000       6,022,712       7,082,711       1,059,999       3.0  
 Computer information system developer
                                        
SKY Perfect JSAT Holdings Inc
     7,550       3,363,149       3,090,982       (272,167 )     1.3  
 Broadcasting and data transmission
                                        

 
2 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
May 31, 2012
  
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
Square Enix Holdings Co., Ltd.
     267,400     $ 5,091,616     $ 4,225,251     $ (866,365 )     1.8  
 Entertainment software
                                        
Total Information and Software
       24,998,679       24,632,502       (366,177 )     10.4  
                                         
Iron and Steel
                                        
Hanwa Co., Ltd.
     1,248,000       5,070,966       4,623,108       (447,858 )     2.0  
 Steel imports/exports
                                        
Neturen Co., Ltd.
     332,900       2,750,577       2,406,865       (343,712 )     1.0  
 Induction hardening equipment
                                        
Yamato Kogyo Co., Ltd.
     176,800       4,801,894       4,794,615       (7,279 )     2.0  
 Railroad related and steel products
                                        
Total Iron and Steel
       12,623,437       11,824,588       (798,849 )     5.0  
                                         
Machinery and Machine Tools
                                        
Asahi Diamond Industrial Co., Ltd.
     285,700       4,170,455       2,842,949       (1,327,506 )     1.2  
 Instruments and machines for diamond objects
                                        
Disco Corporation
     126,500       7,444,249       6,762,502       (681,747 )     2.9  
 Precision cutting, grinding, and polishing machines
                                        
Star Micronics Co., Ltd.
     342,100       3,350,326       3,312,407       (37,919 )     1.4  
 Small-sized precision components and equipments
                                        
THK Co., Ltd.
     248,500       5,888,163       4,713,834       (1,174,329 )     2.0  
 Linear motion systems
                                        
Total Machinery and Machine Tools
       20,853,193       17,631,692       (3,221,501 )     7.5  
                                         
Miscellaneous Manufacturing
                                        
Asahi Intecc Co., Ltd.
     114,100       2,788,081       3,008,270       220,189       1.3  
 Medical tools
                                        
Hogy Medical Co., Ltd.
     114,400       5,113,658       4,661,634       (452,024 )     2.0  
 Medical supply products
                                        
Nihon Kohden Corporation
     115,900       2,858,541       3,319,254       460,713       1.4  
 Medical equipment
                                        
Toyo Tanso Co., Ltd.
     137,800       6,098,931       3,909,482       (2,189,449 )     1.7  
 Carbon and graphite
                                        
Total Miscellaneous Manufacturing
       16,859,211       14,898,640       (1,960,571 )     6.4  
                                         
Real Estate and Warehouse
                                        
Daibiru Corporation
     436,400       3,890,091       3,110,573       (779,518 )     1.3  
 Leases office buildings, apartments and hotels
                                        
Total Real Estate and Warehouse
       3,890,091       3,110,573       (779,518 )     1.3  
                                         
Restaurants
                                        
Saint Marc Holdings Co., Ltd.
     69,000       2,659,319       2,657,406       (1,913 )     1.1  
 Restaurants and cafes
                                        
Total Restaurants
       2,659,319       2,657,406       (1,913 )     1.1  
                                         
Retail
                                        
Arcs Company, Limited
     283,000       4,996,863       5,841,834       844,971       2.5  
 Supermarkets and discount stores
                                        
Heiwado Co., Ltd.
     212,000       2,662,853       2,957,195       294,342       1.3  
 Supermarkets
                                        
Xebio Co., Ltd.
     187,900       4,162,839       4,533,986       371,147       1.9  
 Sporting goods
                                        
Total Retail
       11,822,555       13,333,015       1,510,460       5.7  
                                         
Services
                                        
Daiseki Co., Ltd.
     350,700       6,684,713       5,693,807       (990,906 )     2.4  
 Waste disposal
                                        

 
3 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
May 31, 2012
  
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
Message Co., Ltd.
     1,906     $ 5,961,337     $ 6,330,204     $ 368,867       2.7  
 Nursing facilities
                                        
NEC Networks & System Integration Corporation
     181,100       2,211,447       2,836,158       624,711       1.2  
 Communication systems
                                        
Park24 Co., Ltd
     419,700       4,602,069       5,570,266       968,197       2.4  
 Parking garages
                                        
Rakuten Inc.
     7,205       6,858,974       7,712,576       853,602       3.3  
 Manages consumer websites
                                        
Resorttrust, Inc.
     263,900       3,822,826       4,419,402       596,576       1.9  
 Timeshare resort hotels
                                        
Total Services
       30,141,366       32,562,413       2,421,047       13.9  
                                         
Transportation
                                        
Kintetsu World Express Inc.
     137,100       3,860,869       4,530,596       669,727       1.9  
 Distribution services
                                        
Total Transportation
       3,860,869       4,530,596       669,727       1.9  
                                         
Utilities
                                        
The Okinawa Electric Power Company, Incorporated
     101,400       4,497,035       3,230,397       (1,266,638 )     1.4  
 Thermal power
                                        
Total Utilities
       4,497,035       3,230,397       (1,266,638 )     1.4  
                                         
Wholesale
                                        
Mitsui Matsushima Co., Ltd.
     2,597,000       5,069,443       4,279,402       (790,041 )     1.8  
 Coal
                                        
Total Wholesale
       5,069,443       4,279,402       (790,041 )     1.8  
                                         
TOTAL JAPANESE COMMON STOCKS
     $ 197,517,689     $ 187,711,196     $ (9,806,493 )     79.7  
                                         
INVESTMENTS IN FOREIGN CURRENCY
                                        
Japanese Yen
                                        
 Non- interest bearing account
     $ 1,086,629     $ 1,101,792     $ 15,163       0.5  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
       1,086,629       1,101,792       15,163       0.5  
                                         
TOTAL INVESTMENTS
     $ 198,604,318     $ 188,812,988     $ (9,791,330 )     80.2  
                                         
OTHER ASSETS LESS LIABILITIES, NET
       47,154,681               19.8  
                                         
NET ASSETS
     $ 235,967,669               100.2  
 
* Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $ 11,101,356
   Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 20,907,849
 
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of May 31, 2012.
 
Japanese Yen
78.29
 =  $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/ Masashi Terachi        
        Masashi Terachi, President
        (Principal Executive Officer)

Date:  July 24, 2012

 

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/ Robert Kleinman             
        Robert Kleinman, Treasurer
        (Principal Financial Officer)

Date:  July 24, 2012
 
 
 
 
6