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: 811-8002
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JAPAN SMALLER CAPITALIZATION FUND, INC.
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(Exact name of registrant as specified in charter)
Two World Financial Center
Building B, 22nd Floor
New York, New York 10281-1712
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(Address of principal executive offices)
Hiroshi Terasaki
Japan Smaller Capitalization Fund, Inc.
Two World Financial Center
Building B, 22nd Floor
New York, New York 10281-1712
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 833-0018
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Date of fiscal year end: February 28, 2006
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Date of reporting period: June 1, 2005 - November 30, 2005
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Item 1. Schedule of Investments
Schedule A
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2005
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------- ---------- ---------- ---------- ------
EQUITY SECURITIES
Automotive Equipment and Parts
F.C.C. Co., Ltd........................................ 47,000 $1,809,004 $2,163,944 $354,940 1.0
Clutches and facings
Musashi Seimitsu Industry Co., Ltd..................... 236,800 3,882,021 6,074,585 2,192,565 2.7
Ball joints, camshafts and gears
Nissin Kogyo Co., Ltd.................................. 29,200 644,363 1,368,807 724,444 0.6
Brake systems
Nittan Valve Co, Ltd................................... 366,500 2,430,106 4,223,133 1,793,028 1.9
Engine valves
Sanoh Industrial Co., Ltd.............................. 254,400 1,784,177 1,915,307 131,130 0.9
Tubes, wires and electrical products
Toyo Tire & Rubber Co., Ltd............................ 287,000 1,533,191 1,419,712 (113,479) 0.5
Tires
Unipres Corporation.................................... 219,300 1,840,380 2,143,982 303,602 1.0
Press processed automobile parts ---------- ---------- --------- ------
Total Automotive Equipment and Parts..................................... 13,923,241 19,309,471 5,386,230 8.6
========== ========== ========= ======
Banks and Finance
The Bank of Fukuoka, Ltd. ............................. 303,000 1,632,072 2,276,140 644,068 1.0
Deposits, loans and exchange transactions
IBJ Leasing Company, Limited........................... 52,800 898,824 1,045,632 146,808 0.6
Leases general machinery, aircrafts and computer
Kansai Urban Banking Corporation....................... 685,000 1,220,065 3,199,624 1,979,559 1.4
General banking services
The Tokyo Star Bank Ltd+............................... 620 2,247,894 2,118,905 (128,989) 1.0
General banking services ------- ---------- ---------- --------- ------
Total Banks and Finance.................................................. 5,998,855 8,640,301 2,641,446 3.9
========== ========== ========= ======
Chemicals and Pharmaceuticals
Asahi Denka Co., Ltd................................... 178,000 1,875,962 2,516,616 640,654 1.1
Resin, insulators, and processed fat/oil products
Kanto Denka Kogyo Co., Ltd............................. 320,000 1,130,337 1,125,715 (4,622) 0.5
Chemicals and metals
Koatsu Gas Kogyo Co., Ltd.............................. 207,000 1,052,245 1,193,482 141,237 0.5
High-pressured gases
Shizuokagas Co., Ltd................................... 340,000 1,004,214 2,429,079 1,424,865 1.1
Natural gas supplier ---------- ---------- --------- ------
Total Chemicals and Pharmaceuticals...................................... 5,062,758 7,264,892 2,202,134 3.2
========== ========== ========= ======
Electric
Mirai Industry Co., Ltd................................ 247,700 2,344,842 2,618,262 273,420 1.2
Plastic molded electric materials ---------- ---------- --------- ------
Total Electric........................................................... 2,344,842 2,618,262 273,420 1.2
========== ========== ========= ======
Electronics
Alpine Electronics, Inc................................ 70,000 984,550 942,302 (42,248) 0.4
Automobile audio and video products
Chiyoda Integre Co., Ltd............................... 20 429 548 119 0.0
Electronic components
Cosel Co., Ltd......................................... 22,900 479,691 709,914 230,223 0.3
Electrical machinery
Dainippon Screen Mfg Co. Ltd........................... 303,000 1,448,505 2,357,159 908,654 1.1
Electronic Components
Elpida Memory, Inc+.................................... 35,000 1,069,788 1,011,907 (57,881) 0.5
Electronic components
Iriso Electronics Co., Ltd............................. 50,200 1,146,839 1,677,878 531,039 0.9
Electronic connectors
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2005
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------- ---------- ---------- ---------- ------
Kuroda Electric Co., Ltd............................... 119,200 $1,372,826 $1,886,483 $513,656 0.7
Materials and components
Meiko Electronics Co., Ltd............................. 116,300 3,178,149 5,927,972 2,749,823 2.6
Printed circuit boards
Nitto Kogyo Corporation................................ 71,300 935,187 1,161,176 225,989 0.5
Power switchboards
Total Electronics........................................................ 10,615,964 15,675,338 5,059,375 7.0
========== ========== ========= ======
Food Manufacturing
Ariake Japan Co., Ltd.................................. 50,083 1,021,687 1,096,448 74,761 0.5
Natural seasonings
Ozeki Co., Ltd......................................... 90,800 2,831,843 2,291,339 (540,504) 1.0
Supermarket chain
Plenus Co., Ltd........................................ 16,460 494,520 413,993 (80,527) 0.3
Japanese lunch-boxes
Sansei Foods Co., Ltd.................................. 79,700 1,706,150 1,488,444 (217,706) 0.7
Candy products
Warabeya Nichiyo Co., Ltd.............................. 93,100 1,771,338 1,433,744 (337,594) 0.6
Japanese lunch-boxes ---------- ---------- --------- ------
Total Food Manufacturing................................................. 7,825,538 6,723,968 (1,101,570) 3.0
========== ========== ========= ======
Information and Software
Argo Graphics Inc...................................... 68,800 1,037,183 1,736,169 698,986 0.8
Computer aided design software
Jastec Co., Ltd........................................ 106,800 2,083,176 2,070,407 (12,768) 0.9
Applications software
Koei Co. Ltd........................................... 94,100 2,498,033 2,610,503 112,470 1.2
Video game software
Kyowea Exeo Corporation................................ 110,000 966,893 1,202,256 235,363 0.4
Designs, constructs, maintains communication and
electrical facilities
Sorun Corporation...................................... 253,500 1,655,994 1,592,914 (63,080) 0.7
Computer software development
Sumisho Computer Systems Corporation................... 14 319 242 (77) 0.0
Computer software development
Tecmo, Ltd............................................. 71,300 766,546 701,233 (65,312) 0.3
Computer game software ---------- ---------- --------- ------
Total Information and Software........................................... 9,008,144 9,913,725 905,581 4.4
========== ========== ========= ======
Iron and Steel
Nakayama Steel Works Ltd............................... 213,000 913,109 984,241 71,132 0.4
Wire rods, steel bars, and C-shaped steel products
Neturen Co., Ltd....................................... 135,800 1,049,348 1,104,102 54,754 0.5
Metal processors
Sanyo Special Steel Co., Ltd........................... 931,000 4,015,235 6,908,109 2,892,875 3.1
Specialty steel products
Yodogawa Steel Works, Ltd.............................. 329,000 1,868,368 1,927,128 58,760 0.8
Surface-treated steel sheets and plates ---------- ---------- --------- ------
Total Iron and Steel..................................................... 7,846,060 10,923,580 3,077,520 4.9
========== ========== ========= ======
Machinery and Machine Tools
Hitachi Construction Machinery Co., Ltd................. 354,100 5,228,237 6,894,113 1,665,877 3.1
Construction machinery
Makino Milling Machine Co., Ltd......................... 398,000 2,371,108 3,651,590 1,280,482 1.6
Industrial machinery
Nachi-Fujikoshi Corp.................................... 750,000 2,163,291 3,653,645 1,490,354 1.6
Machine tools
NS Tool Co., Ltd........................................ 5,500 284,499 294,130 9,631 0.0
Industrial cutting tools
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2005
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------- ---------- ---------- ---------- ------
Senshu Electric Co., Ltd................................. 28,400 $531,622 $598,020 66,398 0.3
Electric wire and cables
Shibaura Mechatronics Corporation........................ 165,000 1,471,583 1,637,936 166,353 0.7
Semiconductor machinery
Shimadzu Corporation..................................... 265,000 1,435,772 1,842,323 406,551 0.8
Precision tools and equipment
Sintokogio, Ltd.......................................... 226,000 1,826,584 2,602,281 775,697 1.2
Engineering equipment
Tsubaki Nakashima Co., Ltd............................... 138,500 1,718,567 2,278,726 560,159 1.0
Bearing balls, blowers and precision ball screws
Yamazen Corporation...................................... 308,000 941,258 2,058,910 1,117,652 0.9
Machinery and tools ---------- ---------- --------- ------
Total Machinery and Machine Tools........................................ 17,972,520 25,511,673 7,539,153 11.4
========== ========== ========= ======
Miscellaneous Manufacturing
Bunka Shutter Co., Ltd................................... 231,000 1,304,898 1,260,439 (44,460) 0.6
Light and heavy weight shutters
Daikoku Denki Co., Ltd................................... 78,600 2,201,288 1,990,040 (211,248) 0.9
Leisure and recreational products
Dainichi Co., Ltd........................................ 83,800 745,429 909,599 164,169 0.4
Oil heating equipment
Dowa Mining Co., Ltd..................................... 473,000 2,997,667 4,138,132 1,140,466 1.9
Produces various metal-related products
Hamamatsu Photonics K.K.................................. 150,000 3,407,951 3,547,107 139,156 1.6
Electron tubes, semiconductors, and image processors
Kimmon Manufacturing Co. Ltd+............................ 337,000 954,469 951,794 (2,675) 0.4
Produces various electronic measurement equipments
Mani, Inc................................................ 66,300 1,160,436 3,988,803 2,828,367 1.8
Medical goods and equipment
Mitsubishi Materials Corporation+........................ 604,000 2,025,602 2,452,843 427,241 1.1
Non-ferrous metals
Nichias Corporation...................................... 420,000 1,887,724 2,421,558 533,834 1.1
Building and construction materials
Nichiha Corporation...................................... 76,100 959,621 1,122,344 162,723 0.5
Ceramic exterior walls and fiber boards
Nippon Kodoshi Corp...................................... 103,000 1,422,095 831,402 (590,694) 0.4
Paper for electric insulation
SK Kaken Co., Ltd........................................ 49,500 1,188,490 1,513,850 325,360 0.7
Paints
Topcon Corporation....................................... 60,000 981,275 1,779,820 798,545 0.8
Medical instruments
Toppan Forms Co.,Ltd..................................... 32,000 444,533 435,847 (8,686) 0.2
Commercial printing
Total Miscellaneous Manufacturing........................................ 21,681,478 27,343,578 5,662,100 12.2
========== ========== ========= ======
Oil and Gas
Teikoku Oil Co., Ltd..................................... 252,000 1,890,462 2,821,642 931,180 1.3
Oil and natural gas ---------- ---------- --------- ------
Total Oil and Gas........................................................ 1,890,462 2,821,642 931,180 1.3
========== ========== ========= ======
Real Estate and Warehouse
Daibiru Corporation....................................... 315,000 2,263,529 2,782,160 518,631 1.2
Leases office buildings, apartments and hotels
Leopalace21 Corporation................................... 197,700 4,023,396 6,343,581 2,320,185 2.8
Property manager
Sanko Soflan Company Inc.................................. 138,000 931,642 1,349,154 417,512 0.7
Designs and constructs housing
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2005
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------- ---------- ---------- ---------- ------
Restaurants
Doutor Coffee Co., Ltd.................................... 141,200 2,746,148 2,967,353 221,205 1.3
Coffee shop chains
Saint Marc Co., Ltd+...................................... 48,300 1,630,894 2,990,625 1,359,731 1.3
Restaurants and bakery shop chain
Yoshinnoya D&C Co. Ltd.................................... 669 1,006,046 1,229,831 223,785 0.6
Fast food chain ---------- ---------- --------- ------
Total Restaurants........................................................ 12,601,655 17,662,703 5,061,048 7.9
========== ========== ========= ======
Retail
Arc Land Sakamoto Co., Ltd................................ 41,800 650,594 782,386 131,792 0.4
Operates home centers
IK Co., Ltd............................................... 43 109,363 113,541 4,178 0.1
Used Motorcycle Dealer
Joshin Denki Co., Ltd..................................... 532,000 2,339,383 3,920,819 1,581,436 1.8
Household appliances and computers
Kirindo Co. Ltd........................................... 30,100 326,947 330,993 4,046 0.2
Drug Store Chain
Komeri Co., Ltd........................................... 46,900 1,325,972 1,720,418 394,446 0.8
Building products
Meganesuper Co., Ltd...................................... 193,760 2,749,736 2,509,530 (240,206) 1.1
Eye glasses chain
Ryohin Keikaku Co., Ltd................................... 45,700 2,334,026 3,009,116 675,090 1.3
Knitwears, food and household items
Shimachu Co., Ltd......................................... 59,000 1,464,575 1,646,626 182,051 0.6
Furniture and home goods
Village Vanguard Co., Ltd. ............................... 229 1,751,520 3,922,707 2,171,187 1.8
Books, cd's, videos and office supplies
Yaoko Co., Ltd............................................ 44,900 957,661 1,050,512 92,851 0.5
Supermarkets ---------- ---------- --------- ------
Total Retail............................................................. 14,009,777 19,006,648 4,996,871 8.5
========== ========== ========= ======
Services
Alps Logistics Co., Ltd................................... 93,300 715,946 1,847,679 1,131,733 0.8
Transportation
Daiwa Logistics Co., Ltd.................................. 29,300 221,903 263,192 41,289 0.1
Transports housing materials and builidng steel frames
Funai Consulting Co., Ltd................................. 61,500 748,463 958,408 209,945 0.4
Management and financial consulting
Hitachi Transport System, Ltd............................. 81,000 619,537 803,401 183,864 0.4
Freight truck and marine transportation
Maeda Road Construction Co., Ltd.......................... 94,000 674,282 659,001 (15,280) 0.3
Constructs highways, runways, and harbor facilities
Meiko Network Japan Co., Ltd.............................. 213,400 1,082,621 1,185,803 103,182 0.5
Private schools and academic tutoring
Obayashi Corporation...................................... 322,000 1,622,900 2,276,265 653,365 1.0
General contractor
Space Co., Ltd............................................ 58,100 736,768 822,891 86,123 0.3
Interior design and display work
Sumikin Bussan Corp....................................... 860,000 2,202,289 2,874,452 672,163 1.3
General trading firm
Tohokushinsha Film Corporation............................ 79,800 1,254,729 2,213,796 959,067 1.0
Produces tv programs, movies and commercial films
Vic Tokai Corporation..................................... 68,400 630,258 767,017 136,759 0.3
Information and telecommunication
Yahagi Construction Co. Ltd............................... 142,000 710,666 825,837 115,171 0.4
General contractor
Yusen Air & Sea Service Co., Ltd.......................... 46,500 1,612,589 1,853,395 240,806 0.8
Domestic and international air freight forwarding ---------- ---------- --------- ------
Total Services........................................................... 12,832,951 17,351,137 4,518,186 7.7
========== ========== ========= ======
Telecommunications
Daimei Telecom Engineering Corp........................... 226,000 1,890,566 2,568,289 677,723 1.2
Telecommunication wire installations
Jupiter Telecommunications Co., Ltd+...................... 2,454 2,005,707 1,902,914 (102,794) 0.9
---------- ---------- --------- ------
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
IN SECURITIES OF UNAFFILIATED ISSUERS
November 30, 2005
% of
Market Unrealized Net
Shares Cost Value Gain/Loss Assets
------- ------------ ------------ ----------- ------
Cable television broadcasting
Total Telecommunications................................................. $3,896,273 $4,471,203 $574,929 2.0
============ ============ =========== ======
Textiles and Apparel
Seiren Co., Ltd........................................... 80,000 740,560 1,102,987 362,427 0.4
Dyeing processor of filament fibers
Workman Co., Ltd.......................................... 79,300 1,548,924 2,557,744 1,008,820 1.1
Uniforms ------------ ------------ ----------- ------
Total Textiles and Apparel............................................... 2,289,484 3,660,731 1,371,247 1.6
============ ============ =========== ======
Transportation
Keisei Electric Railway Co., Ltd.......................... 332,000 1,614,165 2,219,344 605,179 1.0
Passenger rail and bus transportation ------------ ------------ ----------- ------
Total Transportation..................................................... 1,614,165 2,219,344 605,179 1.0
============ ============ =========== ======
Wholesale
Hitachi High-Technologies Corporation...................... 133,100 2,064,939 2,913,909 848,970 1.3
Computers and electrical devices
Kondotec, Inc.............................................. 205,500 1,400,365 2,172,196 771,831 1.0
Construction materials
Meiko Shokai Co., Ltd...................................... 63,400 993,359 1,242,306 248,947 0.6
Office equipment
Rentrak Japan Co., Ltd..................................... 291,700 2,536,598 3,119,916 583,318 1.4
Videocassettes and DVDs
Ryoden Trading Co., Ltd.................................... 125,000 873,137 948,402 75,265 0.4
Electronic components
Ryosan Co., Ltd............................................ 41,400 1,003,483 1,072,404 68,921 0.5
Electronic parts
Shinko Shoji Co., Ltd...................................... 110,000 960,246 1,403,551 443,305 0.6
Electronic parts
Takachiho Electric Co., Ltd................................ 28,500 350,315 396,511 46,196 0.2
Electronic parts, optical materials and equipment
Takihyo Co., Ltd........................................... 173,000 667,942 663,522 (4,420) 0.3
Apparel, accessories and interior products
Takihyo Co., Ltd-W/I....................................... 99,500 385,173 378,295 (6,878) 0.2
Apparel, accessories and interior products
Tomen Electronics Corporation.............................. 9,000 224,794 216,587 (8,207) 0.1
Semiconductors and electronic equipment
Yuasa Trading Co., Ltd.+................................... 2,903,000 5,456,308 6,355,429 899,122 2.8
Industrial machinery ------------ ------------ ----------- ------
Total Wholesale.......................................................... 16,916,659 20,883,029 3,966,370 9.3
============ ============ =========== ======
TOTAL INVESTMENTS IN EQUITY SECURITIES................................... $168,330,826 $222,001,225 $53,670,398 99.0
============ ============ =========== ======
% of
Principal Market Unrealized Net
Amount Cost Value Gain/Loss Assets
------ ---- ----- --------- ------
INVESTMENTS IN FOREIGN CURRENCY
Hong Kong Shanghai Bank- Tokyo
Non- interest bearing account..............JPY...289,071,276 $2,415,469 $2,415,469 $0 1.1
---------- - ----------- --- ----
TOTAL INVESTMENTS IN FOREIGN CURRENCY................................ 2,415,469 2,415,469 0 1.1
---------- - ----------- --- ---
TOTAL INVESTMENTS ................................................... $170,746,296 $224,416,694 $53,670,398 100.1
------------ - ----------- ------------ ------
OTHER ASSETS LESS LIABILITIES, NET.......................................................... ($248,968). (0.1)
---------- -----
NET ASSETS.................................................................................. $224,167,726 . 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 $56,570,733. Aggregate gross
unrealized depreciation for all securities in which there is an excess of tax
cost over value was $2,900,335.
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of November 30, 2005.
Japanese Yen 119.68 =$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/ Hiroshi Terasaki
Hiroshi Terasaki, President
(Principal Executive Officer)
Date: January 27, 2006
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 27, 2006