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<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>3
<FILENAME>eyrep.txt
<TEXT>

             Report of Independent Registered Public Accounting Firm

To the Shareholders and
Board of Directors of Japan Smaller Capitalization Fund, Inc.

In planning and performing our audit of the financial statements of Japan
Smaller Capitalization Fund, Inc. for the year ended February 28, 2005, we
considered its internal control, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on internal control.

The management of Japan Smaller Capitalization Fund, Inc. is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in conformity with
U.S. generally accepted accounting principles. Those controls include the
safeguarding of assets against unauthorized acquisition, use, or disposition.

Because of inherent limitations in internal control, error or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.

Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under auditing standards
of the Public Company Accounting Oversight Board (United States). A material
weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk
that misstatements caused by error or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving internal control and
its operation, including controls for safeguarding securities that we consider
to be material weaknesses as defined above as of February 28, 2005.

This report is intended solely for the information and use of management and the
Board of Directors of Japan Smaller Capitalization Fund, Inc. and the Securities
and Exchange Commission and is not intended to be and should not be used by
anyone other than these specified parties.


                                              ERNST & YOUNG LLP

New York, New York
April 1, 2005




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