Investment Company Act file number:

 

JAPANESE EQUITY SECURITIES (97.3%)

Banks

The Akita Bank, Ltd.

1,067,000

3,130,303

General banking services

The Bank of Saga Ltd.

411,000

908,964

General banking services

The Taiko Bank, Ltd.

1,462,000

2,547,084

General banking services

The Yamanashi Chuo Bank, Ltd.

1,109,000

3,964,290

General banking services

Total Banks (3.3%)

10,550,641

Chemicals

C. Uyemura &  Co., Ltd.

126,900

 

5,269,363

Plating chemicals

Fujikura Kasei Co., Ltd.

972,300

5,081,799

Specialty coating materials and fine chemicals

Fuso Chemical Co., Ltd.

9,800

141,719

Manufactures fruit acids, electronic and functional chemical products

JSR Corporation

165,700

2,438,084

Manufactures synthetic resin products

Koatsu Gas Kogyo Co., Ltd.

407,000

2,413,784

High-pressured gases and chemicals

Sakai Chemical Industry Co., Ltd.

2,317,000

6,504,667

Manufactures components for cosmetics and pharmaceuticals

Sekisui Jushi Corporation

220,100

3,190,834

Manufactures plastics and other resin materials

Shikoku Chemicals Corporation

37,000

298,926

Manufactures chemical products

Soken Chemical & Engineering Co., Ltd.

271,400

2,192,661

Manufactures chemical products

Takiron Co., Ltd.

415,000

1,940,513

Manufactures resin and composite products

Tenma Corporation

191,900

3,021,065

Manufactures synthetic resin products

Teraoka Seisakusho Co., Ltd.

356,700

1,094,764

Manufactures various adhesive tapes

T&K Toka Co., Ltd.

116,800

919,386

Manufactures specialized inks for printing applications

Yushiro Chemical Industry Co., Ltd.

129,500

1,571,114

Manufactures metalworking fluids

Zeon Corporation

209,000

1,577,216

Manufactures synthetic resin products

Total Chemicals (11.6%)

37,655,895

Construction

Daiichi Kensetsu Corporation

19,100

194,655

Construction and real estate businesses

Mirai Industry Co., Ltd.

35,700

445,686

Manufactures electrical installation materials

MIRAIT Holdings Corporation

910,600

9,296,702

Construction of electrical and telecommunication facilities

NDS Co., Ltd.

176,000

440,079

Construction of communication infrastructure

Taihei Dengyo Kaisha, Ltd.

209,000

2,148,863

Construction of thermal and nuclear plant facilities

Toenec Corporation

1,359,000

7,262,394

Construction of comprehensive building facilities

Yondenko Corporation

234,000

859,704

Construction of electrical distribution systems

Total Construction (6.5%)

20,648,083

Electronic Appliances

Espec Corp.

329,800

4,406,066

Manufactures environmental testing products

Hitachi Maxell, Ltd.

177,900

2,546,934

Manufactures media devices, batteries and electrical appliances

Hosiden Corporation

169,300

1,169,114

Manufactures electronic components

Japan Aviation Electronics Industry, Limited

123,000

1,648,808

Manufactures electronic equipment and components

Kitagawa Industries Co., Ltd.

336,900

3,740,630

Manufactures various industrial and consumer products

Koito Manufacturing Co., Ltd.

65,200

3,078,137

Manufactures lighting equipment

Nichicon Corporation

569,400

4,003,995

Manufactures capacitors and transformers

Nihon Kohden Corporation

72,600

2,097,129

Manufactures medical electronic equipment

Shindengen Electric Manufacturing Co., Ltd.

240,000

927,243

Manufactures semiconductor products, electrical components, and power supplies

Total Electronic Appliances (7.5%)

23,618,056

Financing Business

Hitachi Capital Corporation

127,800

2,871,405

General financial services

Ricoh Leasing Company, Ltd.

160,500

4,411,649

Leasing and financial services

Total Financing Business (2.3%)

7,283,054

Food

Taiyo Kagaku Co., Ltd.

51,300

387,598

General food manufacturer

Total Food (0.1%)

387,598

Glass and Ceramics Products

Nichiha Corporation

154,700

2,144,965

Manufactures exterior building materials

Total Glass and Ceramics Products (0.7%)

2,144,965

Information and Communication

Broadleaf Co., Ltd.

167,900

1,655,053

Business software development, sales, and technical support

NS Solutions Corporation

8,100

140,971

System consulting services and software development

OBIC Co., Ltd.

47,700

2,596,416

Computer system integration

Okinawa Cellular Telephone Company

160,900

4,355,832

Telecommunications

Otsuka Corporation

35,400

1,677,649

Computer information system developer

Software Service Inc.

4,000

151,652

Provides medical information systems

Total Information and Communication (3.2%)

10,577,573

.

Iron and Steel

Chubu Steel Plate Co., Ltd.

851,000

3,833,264

Manufactures steel-related products

Mory Industries Inc.

1,774,000

5,044,322

Manufactures steel tubing products

Nichia Steel Works, Ltd.

1,945,900

4,022,487

Manufactures steel-related products

Nippon Seisen Co., Ltd.

554,000

2,380,430

Manufactures stainless steel wires and metal fibers

Osaka Steel Co., Ltd.

340,700

5,917,194

Manufactures steel-related products

Tohoku Steel Co., Ltd.

500

4,802

Manufactures specialty steel

Total Iron and Steel (6.5%)

21,202,499

Machinery

Hisaka Works, Ltd.

763,400

6,029,744

Manufactures heat exchangers and other machinery

Miura Co., Ltd.

81,300

1,716,562

Manufactures boilers and related products

Nippon Pillar Packing Co., Ltd.

287,700

2,389,276

Manufactures mechanical seals

Nissei ASB Machine Co., Ltd.

9,300

173,777

Manufactures stretch blow molding machines

Nissei Corporation

24,400

205,499

Manufactures reducers and gears

Nitto Kohki Co., Ltd.

100,400

2,207,749

Manufactures machine tools and motor pumps

Oiles Corporation

352,180

5,944,905

Manufactures bearing equipment

Sato Holdings Corporation

138,300

2,983,725

Manufactures electronic printers and other products

Shibuya Kogyo Co., Ltd.

31,500

485,381

Engaged in the packing plant business

Tsubakimoto Chain Co.

117,000

863,929

Manufactures chains for power transmission and other transportation components

Yamashin-Filter Corporation

47,200

177,671

Manufactures filters

Total Machinery (7.3%)

23,178,218

Metal Products

Dainichi Co., Ltd.

267,200

1,468,901

Manufactures oil heating equipment

Neturen Co., Ltd.

586,900

4,455,524

Manufactures steel bars and induction heating equipment

NHK Spring Co., Ltd.

383,300

3,300,850

Manufactures automobile-related products

Piolax, Inc.

87,000

4,484,293

Manufactures automobile-related products

Rinnai Corporation

18,300

1,595,757

Manufactures heating appliances and components

Total Metal Products (4.8%)

15,305,325

Other Products

Fuji Seal International, Inc.

70,500

2,746,051

Packaging-related materials and machinery

Nishikawa Rubber Co., Ltd.

306,600

4,998,372

Manufactures rubber automobile parts

Pigeon Corporation

80,000

2,180,899

Manufactures baby care products

The Pack Corporation

83,800

2,039,401

Manufactures paper and chemical products

Total Other Products (3.8%)

11,964,723

Pharmaceutical

KYORIN Holdings, Inc.

118,000

2,284,799

Manufactures pharmaceuticals

Total Pharmaceutical (0.7%)

2,284,799

Precision Instruments

Nakanishi Inc.

42,700

1,466,632

Manufactures dental instruments

Total Precision Instruments (0.5%)

1,466,632

Real Estate

Daibiru Corporation

266,800

2,492,670

Real estate leasing and building management

Heiwa Real Estate Co., Ltd.

64,000

787,435

Leasing, development and management of real estate

Keihanshin Building Co., Ltd.

943,800

5,009,518

Real estate leasing and building management

Sanyo Housing Nagoya Co., Ltd.

191,900

1,678,562

Designs and constructs housing

Total Real Estate (3.1%)

9,968,185

Retail Trade

ABC-Mart, Inc.

47,200

3,059,180

Retail sales of shoes

AIN Pharmaciez Inc.

2,300

147,825

Operates pharmacies and drug store chains

Amiyaki Tei Co., Ltd.

95,400

3,793,437

Operates barbecue restaurant chains

Arc Land Sakamoto Co., Ltd.

400,900

4,346,280

Retail sales, wholesale, food and real estate

Create SD Holdings Co., Ltd.

65,100

1,587,246

Operates pharmacies and drug store chains

Daikokutenbussan Co., Ltd.

66,200

2,874,364

Operates supermarkets

Heiwado Co., Ltd.

2,400

51,085

Operates supermarkets

Hiday Hidaka Corp

72,543

1,749,073

Operates restaurant chains

Jin Co., Ltd.

68,200

2,348,646

Retail sales of eyewear and fashion accessories

Saint Marc Holdings Co., Ltd.

80,700

2,385,742

Operates restaurant chains

San-A Co., Ltd.

800

37,480

Retail sales of home goods

Seria Co., Ltd.

51,600

3,362,990

Discount retail sales

Start Today Co., Ltd.

75,900

3,466,817

Operates retail E-commerce websites

Studious Co., Ltd. †

5,700

133,007

Retail sales of apparel

Sundrug Co., Ltd.

7,600

629,103

Operates pharmacies and drug store chains

United Arrows Ltd.

40,900

1,222,053

Retail sales of apparel

Yamazawa Co., Ltd.

11,900

181,218

Operates supermarkets

Total Retail Trade (9.5%)

31,375,546

Services

EPS Holdings, Inc.

106,400

1,384,986

Performs contract medical research services

JP-Holdings, Inc.

169,400

530,617

Operates child-care centers

Nihon M&A Center Inc.

23,200

1,415,707

Provides merger and acquisition brokerage services

Relia, Inc.

140,800

1,424,777

Provides telemarketing services

Septeni Holdings Co., Ltd.

48,700

1,507,862

Internet advertising and media content business

Step Co., Ltd.

217,100

2,100,841

Operates preparatory schools

Total Services (2.6%)

8,364,790

Textiles and Apparel

Hogy Medical Co., Ltd.

48,300

2,999,675

Manufactures medical products

Komatsu Seiren Co., Ltd.

436,800

2,397,314

Manufactures synthetic fibers and textile products

Seiren Co., Ltd.

418,600

4,564,622

Manufactures synthetic fibers and textile products

Total Textiles and Apparel (3.0%)

9,961,611

Transportation and Warehousing

Alps Logistics Co., Ltd.

512,900

2,509,404

General logistics services

Japan Transcity Corporation

1,725,000

5,403,277

General logistics services

Meiko Trans Co., Ltd.

426,000

3,676,259

Marine logistics services

Nissin Corporation

522,000

1,682,199

General logistics services

Trancom Co., Ltd.

70,600

4,104,207

General logistics services

Total Transportation and Warehousing (5.4%)

17,375,346

Transportation Equipment

Hi-Lex Corporation

44,900

1,115,002

Manufactures control cables

Nissin Kogyo Co., Ltd.

247,100

3,388,201

Manufactures automobile brake systems

Sanoh Industrial Co., Ltd.

388,100

2,017,924

Manufactures automobile components

Total Transportation Equipment (2.0%)

6,521,127

Utilities

Japan Petroleum Exploration Co., Ltd.

64,700

1,443,164

Develops petroleum products such as crude oil and natural gas

Keiyo Gas Co., Ltd.

396,000

1,583,571

Produces gas and energy products

The Okinawa Electric Power Company, Incorporated

142,575

2,778,655

Produces thermal energy products

Total Utilities (1.8%)

5,805,390

Wholesale Trade

Kanaden Corporation

219,700

1,753,158

Factory automation business

Kohsoku Corporation

143,500

1,121,782

Food and industrial packaging materials

Matsuda Sangyo Co., Ltd.

451,600

5,173,140

Precious metals, electronic materials, and food

Paltac Corporation

72,700

1,455,575

Cosmetics and daily necessities

Ryoden Trading Company, Ltd.

1,087,000

6,377,956

Purchases electronic and electrical devices

Senshu Electric Co., Ltd.

256,300

3,535,172

Electrical wires and cables

Shinko Shoji Co., Ltd.

339,300

3,298,665

Electronic components and devices

SIIX Corporation

178,000

6,113,829

Parts procurement, logistics, and manufacturing of electronics

SPK Corporation

22,400

405,821

Automobile components for assembly

Sugimoto & Co., Ltd.

310,700

3,186,091

Machine tools and measuring instruments

Techno Associe Co., Ltd.

355,700

3,169,127

Screws and nonferrous metal products

Win-Partners Co., Ltd.

23,900

339,579

Engaged in the medical equipment supply business

Total Wholesale Trade (11.1%)

35,929,895

TOTAL JAPANESE EQUITY SECURITIES (97.3%)

$

313,569,951

INVESTMENT IN FOREIGN CURRENCY

Japanese Yen

Non-interest bearing account

5,387,263

TOTAL INVESTMENT IN FOREIGN CURRENCY (1.7%)

$

5,387,263

TOTAL INVESTMENTS (99.0%)

$

318,957,214

OTHER ASSETS LESS LIABILITIES, NET (1.0%)

3,153,728

NET ASSETS (100.0%)

$

322,110,942

† Non-income producing security

Portfolio securities and foreign currency holdings were translated at the following exchange rate as of May 31, 2016

Japanese Yen ¥110.78

 = USD $1.00

Notes to Schedule of Investments (Unaudited)

Costs for Federal Income Tax Purposes

As of May 31, 2016, for federal income tax purposes, subject to change, the aggregate cost of securities was $297,089,019 and net unrealized appreciation was $16,480,932,

comprised of gross unrealized appreciation of $36,131,912 and gross unrealized depreciation of $19,650,980. The aggregate cost of investments for tax purposes will depend upon Japan Smaller Capitalization Fund, Inc. (the "Fund") investment experience during the entirety of its fiscal year and may be subject to changes based on tax regulations. Certain tax related calculations are completed and reviewed annually by the Fund.       

Fair Value Measurements

In accordance with generally accepted accounting principles ("GAAP"), fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund.  Unobservable inputs reflect the Fund's own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation.

The three-tier hierarchy of inputs is summarized below.

Level 1 - quoted prices in active markets for identical investments 

Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The following table summarizes the valuation of the Fund's investments by the above fair value hierarchy levels as of May 31, 2016.

Level

Investments in
Securities

Level 1

      Equity Securities

 

$313,569,951

      Foreign Currency

5,387,263

Level 2

-

Level 3

-

Total

 

$318,957,214

During the quarter ended May 31, 2016, there were no transfers between Level 1, Level 2, or Level 3 securities. 

During the quarter ended May 31, 2016, the Fund did not hold any instruments which used significant unobservable inputs (Level 3) in determining fair value.