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<SEC-DOCUMENT>0000866095-03-000012.txt : 20031222
<SEC-HEADER>0000866095-03-000012.hdr.sgml : 20031222
<ACCEPTANCE-DATETIME>20031222122528
ACCESSION NUMBER:		0000866095-03-000012
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20031031
FILED AS OF DATE:		20031222
EFFECTIVENESS DATE:		20031222

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			JAPAN EQUITY FUND INC
		CENTRAL INDEX KEY:			0000866095
		IRS NUMBER:				223060893
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-06142
		FILM NUMBER:		031066994

	BUSINESS ADDRESS:	
		STREET 1:		ONE EVERTRUST PLAZA
		STREET 2:		C/O DAIWA SECURITIES TRUST CO
		CITY:			JERSEY CITY
		STATE:			NJ
		ZIP:			07302
		BUSINESS PHONE:		2019153054

	MAIL ADDRESS:	
		STREET 1:		DAIWA SECURITIES TRUST CO
		STREET 2:		ONE EVERTRUST PLAZA
		CITY:			JERSEY CITY
		STATE:			NJ
		ZIP:			07302

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	JAPAN EMERGING EQUITY FUND INC
		DATE OF NAME CHANGE:	19920407
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>jeqncsr103103.txt
<DESCRIPTION>JEQ ANNUAL REPORT 10-31-03
<TEXT>
<Page>

THE JAPAN EQUITY FUND, INC.

GENERAL INFORMATION


THE FUND

     The investment objective of the Fund is to outperform over the long term,
on a total return basis (including appreciation and dividends), the Tokyo Stock
Price Index ("TOPIX"), a composite market-capitalization weighted index of all
common stocks listed on the First Section of the Tokyo Stock Exchange ("TSE").
The Fund seeks to achieve its investment objective by investing substantially
all of its assets in equity securities of companies listed on the TSE or listed
on the over-the-counter market in Japan or listed on other stock exchanges in
Japan. Daiwa SB Investments (U.S.A.) Ltd. is the Fund's Investment Manager.
Daiwa SB Investments Ltd. is the Fund's Investment Adviser. The Fund implements
an "active" portfolio management policy, which is an approach that involves
quantitative valuation of securities to identify an appropriate universe of
securities from which to select investments, with judgmental analysis then
applied to this universe to determine the actual investments to be made by the
Fund.

SHAREHOLDER INFORMATION

     The Fund's shares are listed on the New York Stock Exchange ("NYSE"). The
Fund understands that its shares may trade periodically on certain exchanges
other than the NYSE, but the Fund has not listed its shares on those other
exchanges and does not encourage trading on those exchanges.

     The Fund's NYSE trading symbol is "JEQ". Weekly comparative net asset value
("NAV") and market price information about the Fund is published each Monday in
The Wall Street Journal, each Sunday in The New York Times, and each Saturday in
Barron's, and also appears in many other newspapers. The Fund's weekly NAV is
also available by visiting www.daiwast.com or calling (800) 933-3440 or (201)
915-3020. Also, the Fund's website includes a monthly market review and a list
of the Fund's top ten industries and holdings.

INQUIRIES

     Inquiries concerning your share account should be directed to PFPC Inc.
(the "Plan Agent") at the number noted below. All written inquiries should be
directed to the Fund, c/o Daiwa Securities Trust Company, One Evertrust Plaza,
9th Floor, Jersey City, NJ 07302-3051.

DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

     A Dividend Reinvestment and Cash Purchase Plan (the "Plan") is available to
provide Shareholders with automatic reinvestment of dividends and capital gain
distributions in additional Fund shares. The Plan also allows you to make
optional annual cash investments in Fund shares through the Plan Agent. A
brochure fully describing the Plan's terms and conditions is available from the
Plan Agent by calling (800) 331-1710 or by writing The Japan Equity Fund, Inc.,
c/o PFPC Inc. P.O. Box 43027, Providence, RI 02940-3027.

<Page>

A brief summary of the material aspects of the Plan follows:

     WHO CAN PARTICIPATE IN THE PLAN? If you wish to participate and your shares
are held in your name, you may elect to become a direct participant in the Plan
by completing and mailing the Enrollment Authorization form on the back cover of
the Dividend Reinvestment and Cash Purchase Plan Brochure available from the
Plan Agent. However, if your shares are held in the name of a brokerage firm,
bank or nominee, you should instruct your nominee to participate in the Plan on
your behalf. If your nominee is unable to participate in the Plan for you, you
should request that your shares be registered in your name, so that you may
elect to participate directly in the Plan.

     MAY I WITHDRAW FROM THE PLAN? If your shares are held in your name and you
wish to receive all dividends and capital gain distributions in cash rather than
in shares, you may withdraw from the Plan without penalty at any time by
contacting the Plan Agent. If your shares are held in nominee name, you should
be able to withdraw from the Plan without a penalty at any time by sending
written notice to your nominee. If you withdraw, you or your nominee will
receive a share certificate for all full shares or, if you wish, the Plan Agent
will sell your shares and send you the proceeds, after the deduction of
brokerage commissions. The Plan Agent will convert any fractional shares to cash
at the then-current market price and send to you a check for the proceeds.

     HOW ARE THE DIVIDENDS AND DISTRIBUTIONS REINVESTED? If the market price of
the Fund's shares on the payment date should equal or exceed their net asset
value per share, the Fund will issue new shares to you at the higher of net
asset value or 95% of the then-current market price. If the market price is
lower than net asset value per share, the Fund will issue new shares to you at
the market price. If the dividends or distributions are declared and payable as
cash only, you will receive shares purchased for you by the Plan Agent on the
NYSE or otherwise on the open market to the extent available.

     WHAT IS THE CASH PURCHASE FEATURE? The Plan participants have the option of
making annual investments in Fund shares through the Plan Agent. You may invest
any amount from $100 to $3,000 annually. The Plan Agent will purchase shares for
you on the NYSE or otherwise on the open market on or about February 15th of
each year. Plan participants should send voluntary cash payments to be received
by the Plan Agent approximately ten days before the annual purchase date. The
Plan Agent will return any cash payments received more than thirty days prior to
the purchase date. You may withdraw a voluntary cash payment by written notice,
if the notice is received by the Plan Agent not less that two business days
before the purchase date.

     IS THERE A COST TO PARTICIPATE? There are no Plan charges or brokerage
charges for shares issued directly by the Fund. However, each participant will
pay a pro rata portion of brokerage commissions for shares purchased on the NYSE
or on the open market by the Plan Agent.

     WHAT ARE THE TAX IMPLICATIONS? The automatic reinvestment of dividends and
distributions does not relieve you of any income tax which may be payable (or
required to be withheld) on such dividends and distributions. In addition, the
Plan Agent will reinvest dividends for foreign participants and for any
participant subject to federal backup withholding after the deduction of the
amounts required to be withheld.

     PLEASE NOTE THAT, IF YOU PARTICIPATE IN THE PLAN THROUGH A BROKERAGE
ACCOUNT, YOU MAY NOT BE ABLE TO CONTINUE AS A PARTICIPANT IF YOU TRANSFER THOSE
SHARES TO ANOTHER BROKER. CONTACT YOUR BROKER OR NOMINEE OR THE PLAN AGENT TO
ASCERTAIN WHAT IS THE BEST ARRANGEMENT FOR YOU TO PARTICIPATE IN THE PLAN.

                                        2
<Page>

                                                                December 3, 2003

  DEAR SHAREHOLDERS:

        It is our pleasure on behalf of the Board of Directors to present the
  Annual Report for The Japan Equity Fund, Inc. (the "Fund") for the fiscal year
  ended October 31, 2003.

  PERFORMANCE AND REVIEW OF THE JAPANESE STOCK MARKET

     The movement of the stock market was characterized by a strong rally after
bottoming out in April 2003. The TSE continued to decline during the first part
of the year and posted a 20-year low average of 7,607 on April 28. However, the
trend shifted upward since then, reaching to the 11,000 level.

        To review the market developments:

        -  November 02: The Nikkei 225 rebounded by 6.7%, recovering to the
           9,000 level on November 28, 2002, while the TOPIX closed 3.5%
           higher. Early in the month, the market fell, dragged by some
           major banks and debt overhanging companies. However, toward the
           end of the month, the market regained lost ground because: (1)
           fears for an immediate nationalization of major banks retreated;
           (2) the U.S. stock market remained steady; and (3) foreign
           investors, who had sold Japanese stocks since June 2002, turned
           into net buyers later in the month.

        -  December 02: In December, the Nikkei 225 declined 6.9% to
           8,578.95, while the TOPIX closed 5.5% lower at 843.29. The Nikkei
           225 fell for nine straight days, the longest such losing streak
           in eleven years, while the TOPIX hit an 18-year low on December
           16, 2002. Though there was no specific negative news on the
           fundamentals, profit-taking after a sharp rise in late November
           as well as selling pressure from individual investors dampened
           the market.

        -  January 03: The Nikkei 225 declined 2.8% to 8,339.94, while the
           TOPIX closed 2.6% lower at 821.18. Early in the month, massive
           foreign investor buying sent the market upward. However, the
           direction reversed thereafter due to: (1) the increase in selling
           pressure from financial institutions and corporate pension funds;
           and (2) the growing tension regarding a military conflict with
           Iraq, together with the weakness of the U.S. stock market.

        -  February 03: Geopolitical risks (Iraq and North Korea) and share
           liquidation by financial institutions forced the market to stay
           in a bottom area after testing strong resistance of the Nikkei
           225, at a level of 8,800. February and the early part of March is
           generally a seasonal weak period even in the 1980's bull market
           years, due to institutional liquidation toward the fiscal year
           end. Geopolitical risks and plummeting bank shares made this
           seasonal weakness even more painful this year.

        -  March 03: The fall in share prices accelerated in March, on the
           back of sales to unwind cross shareholdings in the run-up to the
           closing of full-year accounts. Further, sales related to the
           return of the government portion of employee pension funds, and
           also the increasing lack of buyers due to the uncertainty over
           the Iraq situation, contributed to the market falling to new
           post-bubble lows. Although there was a rebound in share prices
           across the globe once the war in Iraq began, the upturn in Japan
           was muted due to the financial instability that had been
           triggered by the fall in share prices, as well as concerns over
           North Korea. During March, the average daily trading volume on
           the First Section of the TSE was 830 million shares, with an
           average trading value of Y570 billion.

                                        3
<Page>

        -  April 03: April saw investors increasingly focus on low to
           mid-priced stocks as they avoided international blue chips, which
           were particularly affected by the return of the subrogated
           portion of employee pension funds to the government and also the
           U.S. economy, where the war in Iraq led to increasing
           uncertainty. Buyers continued to shy away, not only because of
           the lack of a sense of urgency in government policy, or the
           deterioration in supply/demand conditions caused by the return of
           the subrogated portion of pension funds, but also because
           investors took a wait-and-see attitude to corporate earnings
           announcements. As a result, the market remained on a downward
           trend, hitting new post-bubble lows toward the end of the month.
           During April, the average daily trading volume on the First
           Section of the TSE was 950 million shares, with an average
           trading value of Y590 billion.

           The end of the Iraq war in early April shifted the stock market's
           attention away from the war to the U.S. economy, but lingering
           uncertainties, including the impact from the war, meant that the
           Japanese stock market continued to follow a downward trend, with
           major high techs and international blue chips falling primarily
           due to their susceptibility to U.S. trends and the selling
           pressure from crossholding unwinding and the partial return of
           the pension management to the government (DAIKO HENJO) problem.
           At the end of April, Sony's downward revision of earnings
           projections triggered the market's plunge to a series of
           post-bubble lows.

        -  May 03: In May, reflecting a rise in the U.S. stock market,
           Japanese stocks, especially in the high tech, communications, and
           exporting sectors, climbed despite the strong yen, and the Nikkei
           225 recovered to the 8,300 level at the end of the month when the
           rising yen trend halted. In addition, bank shares went higher on
           expectations that the injection of public funds into Resona Bank
           would lead to the strengthening of the banking sector's capital
           base. Further, the government's announcement of stock market
           support measures made it harder to sell, although they were
           mainly aimed at improving supply and demand. Nonetheless, once
           announcements of corporate results and government measures were
           over, there were few incentives to boost the market further. The
           outlook for the U.S. economy still looked uncertain, while
           concerns about the domestic economy increased following the
           downward revision of economic assessments by the Bank of Japan
           and negative supply-demand factors for major stocks remained. On
           the other hand, low and middle-priced stocks were individually
           picked based on news that had emerged during the peak results
           announcement period.

        -  June 03: The June market benefited from non-Japanese investors
           increasing their positions in Japanese stocks, as they looked
           increasingly undervalued compared to U.S. stocks, which had risen
           on expectations of a mild economic recovery, excessive concerns
           about the financial system diminished, and earnings of Japanese
           companies began to recover. Consequently, the Nikkei 225 regained
           the 9,000 level for the first time since December 2002. The
           selling pressure from supply and demand factors, such as
           crossholdings unwinding and the DAIKO-HENJO problem, also
           lessened somewhat as the need to sell stocks in a hurry decreased
           due to a rise in share prices, and traded volumes recovered
           considerably. However, as there were no definite improvements in
           fundamentals, the market saw increased profit-taking selling at
           the 9,000 level, and became top-heavy amid the lack of aggressive
           buyers.

        -  July 03: At the start of the month of July, despite a slowdown in
           market momentum, the Nikkei 225 recovered to above 10,000 points
           in intraday trading as a result of purchases by non-Japanese
           investors amid the continued bullishness of U.S. markets and
           financial deregulation. This was mirrored by buying from Japanese
           institutional investors following the improvement in the economic
           environment as indicated by

                                        4
<Page>

           the Bank of Japan's June TANKAN survey and a rise in capital
           spending by semiconductor makers. Consequently, trading volume
           exceeded 2 billion shares on July 3 for the first time in 14
           years. The popularity of high-tech issues on U.S. stock markets
           and recovery in securities markets led gains among electrical
           machinery makers, technology issues, banks, and securities
           houses. Laggard automobile-related issues, and domestic-demand
           sensitive stocks were also increasingly sought. However, as the
           Nikkei 225 crossed the 10,000-point threshold, it fell back
           sharply on concerns about overheating, a rebound in Sony's share
           price and a growing sense of having reached a ceiling, based on
           machinery orders. Following signs of a recovery in the U.S.
           economy and capital expenditure trends, electrical machinery,
           high-tech, machinery and iron and steel stocks turned bullish.
           However, since the market had factored in favorable results ahead
           of results announcements, the release of poor results by Sony and
           Toshiba, unchanged forecasts by MEI, and a decrease in profits by
           Honda, made investors increasingly choosy in their stock
           selection as concerns over profitability expanded.

        -  August 03: Expectations of a market recovery swelled against the
           background of an improvement in macro-economic indicators. The
           Nikkei 225 rose, to above the 10,000-mark mid-month, and
           continued to rise throughout the rest of the month. Meanwhile the
           TOPIX recovered to above 1,000 points in mid-August. In addition,
           the upturn in the stock market was conspicuous with trading
           volume remaining high even during the obon holidays. During
           August, the average daily trading volume on the TSE First Section
           was 1.34 billion shares, with average trading value of Y940
           billion.

        -  September 03: The market continued to be upbeat on the back of
           expectations of an economic recovery, monetary easing, and the
           disappearance of factors aggravating supply and demand. The
           cyclical selection of stocks, gains made by some stocks
           irrespective of investment indicators, and excessive market
           liquidity due to monetary easing, were also factors behind the
           market's rise. Further, the volatility in the bond market and
           foreign exchange trends were also seen as influencing the
           fluctuations in the stock market. During September, the average
           daily trading volume on the TSE First Section was 1.45 billion
           shares, with average trading value of Y1.31 trillion.

        -  October 03: The Tokyo stock market in October was characterized
           by fluctuations, with both the TOPIX and Nikkei 225 registering
           their largest declines since the September 11, 2001 terrorist
           attacks in the U.S. after posting new year-highs. Although there
           were strong expectations for positive corporate earnings and
           continued business confidence in the first half of the month
           investors sought domestic-demand sector stocks, such as major
           banks, IT-related stocks, and brokers. This was seen to be due to
           the strong trend in the yen. In the latter half of the month,
           share price indices seemed to undergo adjustments due to the fact
           that there was a lot of profit taking, as trading by non-Japanese
           investors slowed down. However, investors vigorously sought
           stocks on an individual basis, such as high techs, following
           results announcements. Average daily trading volume and value on
           the TSE First Section continued to be upbeat, totaling 1.39
           billion shares and Y1.37 trillion, respectively. Moreover, the
           TSE Second Section, Mothers, Hercules, and JASDAQ Indices were
           all firm, with trading value on the Hercules hitting a new high
           and JASDAQ trading value also reaching its highest level since
           March 2000.

                                        5
<Page>

PERFORMANCE/ATTRIBUTION ANALYSIS

     Table 1. Performance in comparison with the benchmark (TOPIX), U.S. DOLLAR
              ("USD") BASE

<Table>
<Caption>
                                             LATEST 12 MONTHS
                                            (AS OF OCTOBER 31,
                                                   2003)
                                                    %
                                            ------------------
<S>                                               <C>
Japan Equity Fund                                 32.16
Benchmark (TOPIX)                                 36.17
                                                  -----
Difference                                        -4.01
</Table>


     Table 2. Attribution Analysis Summary, JAPANESE YEN ("JPY") BASE (Latest 12
              Months)

<Table>
<Caption>
                                                     (%)
                                                  ---------
<S>                                                 <C>
Portfolio (Equity Only)                             19.76
Benchmark (TOPIX)                                   21.01
                                                    -----
Difference                                          -1.25

BREAKDOWN
Sector Selection                                     1.54
Stock Selection                                     -2.76
                                                    -----
Total                                               -1.25
</Table>

     Table 3. Portfolio Return (Equity Only) vs. Benchmark Return, JPY base
              (monthly)

<Table>
<Caption>
                                   PORTFOLIO   BENCHMARK     RELATIVE      SECTOR       STOCK
                                    RETURN      RETURN        RETURN     SELECTION    SELECTION
                                      (A)         (B)        (A)-(B)       EFFECT       EFFECT
                                      (%)         (%)          (%)           (%)          (%)
                                   ---------   ----------   ----------   ----------   ----------
<S>                                    <C>          <C>          <C>          <C>          <C>
2002    November                        4.97         3.53         1.44          0.4         1.04
        December                       -5.53        -5.54         0.01        -0.12         0.13
2003    January                        -2.35        -2.62         0.27        -0.02         0.29
        February                       -0.74        -0.30        -0.44         0.31        -0.75
        March                          -4.80        -3.75        -1.05         0.07        -1.12
        April                          -0.78         1.09        -1.87        -0.31        -1.56
        May                             3.91         5.16        -1.25         0.16        -1.41
        June                            8.93         7.85         1.08         0.68         0.40
        July                            4.62         3.98         0.64         0.39         0.25
        August                          8.05         6.66         1.36         0.37         0.99
        September                       0.18         1.68         -1.5        -0.60        -0.90
        October                         2.95         2.41         0.54         0.07         0.47
</Table>

                                        6
<Page>

     Table 4. Attribution Analysis Breakdown, JPY base (Latest 12 Months)

<Table>
<Caption>
                                                                                SECTOR        STOCK
                              PORT        BENCH         PORT        BENCH      SELECTION    SELECTION
                             WEIGHT       WEIGHT       RETURN       RETURN       EFFECT       EFFECT
                               (%)          (%)          (%)         (%)          (%)          (%)
                           ----------   ----------   ----------   ----------   ----------   ----------
<S>                            <C>          <C>          <C>           <C>          <C>          <C>
Technology                      18.76        17.12        18.14        26.06         0.08        -1.46
Automobile                      10.84        10.63         8.47        15.21        -0.05        -0.79
Machinery                        3.79         3.40        58.59        37.72         0.48         0.92
Pharmaceutical                   3.56         3.95       -21.60        -4.36         0.10        -0.96
Personal Consumption             7.48         7.29        13.87         9.49         0.30        -0.21
Service                          4.27         3.58        13.88         5.44         0.10         0.50
Construction/Property            3.71         3.54        31.51        38.18         0.01        -0.02
Metal/Glass                      6.53         5.23        45.57        53.86         0.36        -0.51
Chemical/Textile                 7.54         7.32        28.37        23.67        -0.02         0.33
Wholesale/Transportation         9.12         8.42        30.13        29.49         0.03         0.05
Finance                         12.32        15.76        15.52        30.91        -0.13        -1.29
Telecom                         10.69         9.70        17.64        24.15        -0.14        -0.53
Public Utility                   1.38         4.06        10.92         9.06         0.42         0.01
Total                          100.00       100.00        19.79        21.01         1.54        -2.76
</Table>

PERFORMANCE SUMMARY

     As shown in Table 1, the net asset value ("NAV") of the Fund increased by
32.16% in USD terms during the twelve months from November 1, 2002 to October
31, 2003. Over the same period, the benchmark (TOPIX index) gained 36.17% in USD
terms. The appreciation of the JPY against the USD was a positive factor for the
absolute return in the NAV.

     Table 2 shows that the performance of the equity part of the portfolio,
excluding expenses and some cash positions in JPY terms, represents 19.76% in
comparison with 21.01% for the benchmark.

FUND PERFORMANCE

     As of October 31, 2003, the Fund's net assets were approximately $64.9
million, which represents a net asset value of $6.00 per share. The change in
net asset value in USD depends on several factors such as: (1) the percentage
change in the Benchmark during the period; (2) the over- or under-performance of
the Fund's portfolio, after expenses, relative to the Benchmark; and (3) the
change in the JPY/USD exchange rate.

     Our investment strategy is to invest in undervalued securities based on
intensive bottom-up analysis supported by quantitative screening. In our
research efforts, we place a priority on evaluation of the top management, and
its commitment to enhance shareholder value through clear-cut strategies,
including restructuring, that will be eventually reflected in share prices. We
add value primarily through a bottom-up stock selection approach for the
fundamental Japan equity product.

                                        7
<Page>

     It is important to emphasize again that it has not been an objective of the
Fund to predict changes in its Benchmark. Rather, its goal is to outperform the
Benchmark, while staying fairly fully invested. Specifically, the goal is to
hold no more than 5% in cash. On October 31, 2003, the portion of the Fund's net
assets invested in Japanese equities listed on the First Section of the TSE was
96.86%, while short-term investments and other net assets represented 3.14%.

     The invested position of the Fund's assets consisted of common stocks of
Japanese companies operating in 29 different industries. The Fund had relatively
large weightings in Electric Appliances (17.36% of net assets), Communication
(9.75%), Transportation Equipment (9.38%) and Retail Trade (6.43%).

     During the fiscal year ended October 31, 2003, the Fund's market price on
the New York Stock Exchange ("NYSE") ranged from a low of $4.02 per share on
March 11, 2003 to a high of $7.70 on October 14, 2003. The Fund's NYSE market
price closed at $7.16 per share on October 31, 2003.

     The NYSE trading price in relation to the Fund's net asset value per share,
as measured by the weekly closing prices during the fiscal year ended October
31, 2003, ranged from a discount of 6.71% on May 22, 2003 to a premium of 29.70%
on July 3, 2003, and ended the period at a premium of 19.33%.

     The Fund has not invested in derivative securities. Although foreign
currency hedging is permitted by the Fund's prospectus, the Fund has not engaged
in any foreign currency hedging.

PORTFOLIO MANAGEMENT

     Mr. Koichi Ogawa, CFA, is the Executive Director and Chief Portfolio
Manager of Daiwa SB Investments Ltd. ("DSBI") for all North American clients. A
senior member of the Investment Policy Committee (IPC) of DSBI, Mr. Ogawa
possesses 29 years of investment experience and has been responsible for Japan
stock selection since 1984. He spent nine years with Daiwa Securities as an
institutional research analyst and three years in New York analyzing U.S.
securities. He graduated from Tohoku University with a B.A. in Law in 1972.

     Mr. Kazuhiko Hosaka, CMA, is a Senior Portfolio Manager, with a total of 15
years of experience in the Japanese equity market. He joined Daiwa in 1990 as a
portfolio manager after spending two years as a securities analyst at Barclays
Securities Group. He has been directly responsible for managing Japanese equity
portfolios for several North American and European pension clients. He graduated
from Aoyama Gakuin University with a B.A. in Law in 1988.

RIGHTS OFFERING

     On November 10, 2003 the Fund announced the record date for a rights
offering (the "Offering") of its shares of common stock. The Fund will issue to
stockholders of record as of December 4, 2003 (the "Record Date") one
transferable right for each share of common stock held. Three rights will
entitle the holder to purchase one share of common stock at the subscription
price. The subscription price will not be determined until December 23, 2003,
the expiration date of the Offering (the "Expiration Date"), and will equal 90%
of the average of the closing price of the Fund's common stock on the New York
Stock Exchange on the Expiration Date of the Offering and for the four
immediately preceding trading days, with a requirement that the price be no
lower than 95% of the net asset value per share of common stock of the Fund at
the Expiration Date.

                                        8
<Page>

     We thank you for your support of The Japan Equity Fund, Inc. and your
continued interest in the Japanese economy and marketplace.

     Sincerely,


  /s/ Hiroshi Kimura                                        /s/ Shunsuke Ichijo
  HIROSHI KIMURA                                            SHUNSUKE ICHIJO
  CHAIRMAN OF THE BOARD                                     PRESIDENT

                                        9
<Page>

THE JAPAN EQUITY FUND, INC.

PORTFOLIO OF INVESTMENTS

OCTOBER 31, 2003

COMMON STOCKS--96.86%

<Table>
<Caption>
  SHARES                                                          VALUE
- ----------                                                    -------------
<S>                                                           <C>
BANKS--5.45%
      267   Mitsubishi Tokyo Financial Group Inc.             $   1,934,783
  185,000   The Sumitomo Trust & Banking Co., Ltd.                1,041,919
      130   UFJ Holdings, Inc.*                                     560,448
                                                              -------------
                                                                  3,537,150
                                                              -------------
CHEMICALS--5.48%
  239,000   Denki Kagaku Kogyo Kabushiki Kaisha                     732,214
   19,900   Hitachi Chemical Co., Ltd.                              324,183
  158,000   Mitsui Chemicals Inc.                                   930,435
   20,000   Nifco Inc.                                              258,118
   35,000   Shin-Etsu Chemical Co., Ltd.                          1,313,062
                                                              -------------
                                                                  3,558,012
                                                              -------------
COMMERCE--0.89%
   67,000   Canon Sales Co., Inc.                                   574,619
                                                              -------------
COMMUNICATION--9.75%
   20,200   Hitachi Information System, Ltd.                        587,360
      130   KDDI Corp.                                              711,888
      370   NTT Corp.                                             1,666,392
    1,110   NTT DoCoMo, Inc.                                      2,423,225
    3,700   TIS Inc.                                                131,343
   50,000   Tokyo Broadcasting System, Inc.                         807,650
                                                              -------------
                                                                  6,327,858
                                                              -------------
CONSTRUCTION--1.54%
   55,000   Daiwa House Industry Co., Ltd.                          598,331
  103,000   Shimizu Corp.                                           401,532
                                                              -------------
                                                                    999,863
                                                              -------------
ELECTRIC APPLIANCES--17.36%
   42,000   ALPS Electric Co., Ltd.                           $     710,017
   21,000   Canon Inc.                                            1,024,766
   30,000   Casio Computer Co., Ltd.                                269,400
    9,800   Fanuc Ltd.                                              594,185
  185,000   Hitachi Ltd.                                          1,096,221
   55,000   Japan Radio Co., Ltd.                                   268,391
   13,000   Kyocera Corp.                                           789,396
  150,000   Matsushita Electric Industrial Co., Ltd.              1,993,671
    9,000   NEC Electronics Corp.                                   698,404
   40,000   Nippon Chemi-con Corp.                                  159,604
    2,700   Rohm Co., Ltd.                                          367,034
   61,000   Sharp Corp.                                             968,547
   50,000   Taiyo Yuden Co., Ltd.                                   729,224
    8,500   TDK Corp.                                               561,365
  170,000   Toshiba Corp.                                           687,672
   30,000   Yokogawa Electric Corp.                                 353,605
                                                              -------------
                                                                 11,271,502
                                                              -------------
ELECTRIC POWER & GAS--1.33%
   10,000   Kansai Electric Power Co., Inc.                         174,280
  200,000   Tokyo Gas Co., Inc.                                     691,616
                                                              -------------
                                                                    865,896
                                                              -------------
FOODS--0.80%
   60,000   Fuji Oil Co., Ltd.                                      520,638
                                                              -------------
GLASS & CERAMIC PRODUCTS--1.07%
   60,000   NGK Insulators, Ltd.                                    413,319
    7,000   Nippon Electric Glass Co., Ltd.                         129,701
   80,000   Sumitomo Osaka Cement Co., Ltd.                         148,964
                                                              -------------
                                                                    691,984
                                                              -------------
</Table>

                                       10
<Page>

<Table>
<Caption>
  SHARES                                                          VALUE
- ----------                                                    -------------
<S>                                                           <C>
INSURANCE--0.70%
   97,000   Nissay Dowa General Insurance Co., Ltd.           $     453,770
                                                              -------------
IRON & STEEL--2.76%
  550,000   Kobe Steel, Ltd.*                                       711,337
  355,000   Nippon Steel Corp.                                      735,920
  170,000   Nisshin Steel Co., Ltd.                                 341,497
                                                              -------------
                                                                  1,788,754
                                                              -------------
LAND TRANSPORTATION--1.44%
       40   East Japan Railway Co.                                  182,719
   56,000   Yamato Transport Co., Ltd.                              750,468
                                                              -------------
                                                                    933,187
                                                              -------------
MACHINERY--3.99%
   30,000   Amada Co., Ltd.                                         130,710
   85,000   Komatsu Ltd.                                            463,906
  130,000   Mitsubishi Heavy Industries, Ltd.                       360,117
  180,000   NSK Ltd.                                                747,936
   11,000   Ricoh Co., Ltd.                                         210,374
   33,200   THK Co., Ltd.                                           679,105
                                                              -------------
                                                                  2,592,148
                                                              -------------
MARINE TRANSPORTATION--0.69%
  110,000   Mitsui O.S.K. Lines, Ltd.                               451,018
                                                              -------------
METAL PRODUCTS--0.85%
   30,000   NHK Spring Co., Ltd.                                    137,865
   23,000   Tostem Inax Holding Corp.                               413,291
                                                              -------------
                                                                    551,156
                                                              -------------
NON-FERROUS METALS--1.66%
   85,000   Fujikura Ltd.                                           515,364
  140,000   Mitsui Mining & Smelting Co., Ltd.                      565,034
                                                              -------------
                                                                  1,080,398
                                                              -------------
OTHER FINANCING BUSINESS--1.73%
   52,000   Hitachi Capital Corp.                             $     703,541
    2,870   SFCG Co., Ltd.                                          421,734
                                                              -------------
                                                                  1,125,275
                                                              -------------
OTHER PRODUCTS--1.82%
  128,000   Toppan Printing Co., Ltd.                             1,183,489
                                                              -------------
PHARMACEUTICAL--3.44%
   37,000   Takeda Chemical Industries, Ltd.                      1,320,216
   36,000   Yamanouchi Pharmaceutical Co., Ltd.                     911,392
                                                              -------------
                                                                  2,231,608
                                                              -------------
PRECISION INSTRUMENTS--0.51%
   40,000   Citizen Watch Co., Ltd.                                 330,582
                                                              -------------
REAL ESTATE--2.05%
  142,000   Mitsui Fudosan Co., Ltd.                              1,332,471
                                                              -------------
RETAIL TRADE--6.43%
   13,000   Fast Retailing Co., Ltd.                                796,551
    2,000   Hard Off Corp. Co., Ltd.                                 42,928
   53,400   Isetan Co., Ltd.                                        557,413
   68,000   Marui Co., Ltd.                                         870,739
    7,800   Matsumotokiyoshi Co., Ltd.                              395,652
    4,500   Nitori Co., Ltd.                                        289,351
   17,000   Otsuka Kagu Ltd.                                        498,991
   69,000   Uny Co., Ltd.                                           724,051
                                                              -------------
                                                                  4,175,676
                                                              -------------
RUBBER PRODUCTS--1.12%
  260,000   Yokahama Rubber Co., Ltd.                               727,389
                                                              -------------
</Table>

                                       11
<Page>

<Table>
<Caption>
  SHARES                                                          VALUE
- ----------                                                    -------------
<S>                                                           <C>
SECURITIES--4.06%
  230,000   Nikko Cordial Corp.                               $   1,251,055
   80,000   Nomura Holdings Inc.                                  1,385,434
                                                              -------------
                                                                  2,636,489
                                                              -------------
SERVICES--2.93%
    6,700   Meitec Corp.                                            241,524
    1,800   OBIC Co., Ltd.                                          399,560
   13,500   Secom Co., Ltd.                                         532,471
      100   The Goodwill Group, Inc.                                726,472
                                                              -------------
                                                                  1,900,027
                                                              -------------
TEXTILE & APPAREL--1.82%
  195,000   Mitsubishi Rayon Co., Ltd.                              729,774
   40,000   Onward Kashiyma Co., Ltd.                               452,761
                                                              -------------
                                                                  1,182,535
                                                              -------------
TRANSPORTATION EQUIPMENT--9.38%
   40,000   Denso Corp.                                             764,997
   20,000   Honda Motor Co., Ltd.                                   796,184
  140,000   Mazda Motor Corp.                                       362,135
   15,000   Nissan Motor Co., Ltd.                                  169,510
   15,600   Shimano Inc.                                            300,495
   10,300   Showa Corp.                                             102,981
   14,800   Toyota Industries Corp.                                 275,582
   98,000   Toyota Motor Corp.                                    2,813,612
   44,000   Yamaha Motor Co., Ltd.                                  503,284
                                                              -------------
                                                                  6,088,780
                                                              -------------
WAREHOUSING--1.35%
  100,000   Mitsubishi Logistics Corp.                              877,821
                                                              -------------
WHOLESALE TRADE--4.46%
   15,000   Autobacs Seven Co., Ltd.                          $     330,215
    3,600   Kuroda Electric Co., Ltd.                               114,584
   63,000   Mitsubishi Corp.                                        659,356
  150,000   Mitsui & Co., Ltd.                                    1,100,715
       91   Net One Systems Co., Ltd.                               687,800
                                                              -------------
                                                                  2,892,670
                                                              -------------
Total Common Stocks
  (Cost--$57,173,942)                                            62,882,765
                                                              -------------
</Table>

SHORT-TERM INVESTMENTS--0.23%

<Table>
<Caption>
PRINCIPAL
 AMOUNT
  (000)
- ---------
<S>                                                           <C>
U.S. DOLLAR TIME DEPOSIT--0.23%
  $   149   Bank of New York Time
              Deposit, 0.05%,
              due 11/3/03
              (Cost--$149,229)                                      149,229
                                                              -------------
Total Investments--97.09%
  (Cost--$57,323,171)                                            63,031,994
Other assets less liabilities--2.91%                              1,886,378
                                                              -------------
NET ASSETS (Applicable to
  10,815,688 shares of capital stock
  outstanding; equivalent to $6.00
  per share)--100.00%                                         $  64,918,372
                                                              =============
</Table>

- ----------
  *  Non-income producing securities.

                                       12
<Page>

THE JAPAN EQUITY FUND, INC.

TEN LARGEST EQUITY POSITIONS HELD
OCTOBER 31, 2003

<Table>
<Caption>
                                              PERCENT OF
ISSUE                                         NET ASSETS
- -----                                         ----------
<S>                                              <C>
Toyota Motor Corp.                               4.33%
NTT DoCoMo, Inc.                                 3.73
Matsushita Electric Industrial Co., Ltd.         3.07
Mitsubishi Tokyo Financial Group Inc.            2.98
NTT Corp.                                        2.57
Nomura Holdings Inc.                             2.13
Mitsui Fudosan Co., Ltd.                         2.05
Takeda Chemical Industries, Ltd.                 2.03
Shin-Etsu Chemical Co., Ltd.                     2.02
Nikko Cordial Corp.                              1.93
</Table>

TEN LARGEST EQUITY CLASSIFICATIONS HELD
OCTOBER 31, 2003

<Table>
<Caption>
                                              PERCENT OF
INDUSTRY                                      NET ASSETS
- --------                                      ----------
<S>                                             <C>
Electric Appliances                             17.36%
Communication                                    9.75
Transportation Equipment                         9.38
Retail Trade                                     6.43
Chemicals                                        5.48
Banks                                            5.45
Wholesale Trade                                  4.46
Securities                                       4.06
Machinery                                        3.99
Pharmaceutical                                   3.44
</Table>

                                       13
<Page>

THE JAPAN EQUITY FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

OCTOBER 31, 2003

<Table>
<S>                                                                                                 <C>
ASSETS
   Investment in securities, at value (cost--$57,323,171)                                           $ 63,031,994
   Cash denominated in foreign currency (cost--$1,327,293)                                             1,325,093
   Receivable for securities sold                                                                      2,105,387
   Interest and dividends receivable                                                                     218,291
   Deferred rights expense                                                                                15,150
   Prepaid expenses                                                                                       33,891
                                                                                                    ------------
     Total assets                                                                                     66,729,806
                                                                                                    ------------
LIABILITIES
   Payable for securities purchased                                                                    1,704,890
   Accrued expenses and other liabilities                                                                106,544
                                                                                                    ------------
     Total liabilities                                                                                 1,811,434
                                                                                                    ------------
NET ASSETS
   Capital stock, $0.01 par value per share; total 30,000,000 shares authorized;
    10,815,688 shares issued and outstanding                                                             108,157
   Paid-in capital in excess of par value                                                            107,239,148
   Accumulated net realized loss on investments                                                      (48,137,844)
   Net unrealized appreciation on investments and other assets and liabilities
    denominated in foreign currency                                                                    5,708,911
                                                                                                    ------------
     Net assets applicable to shares outstanding                                                    $ 64,918,372
                                                                                                    ============
          NET ASSET VALUE PER SHARE                                                                 $       6.00
                                                                                                    ============
</Table>

                 See accompanying notes to financial statements.

                                       14
<Page>

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED OCTOBER 31, 2003

<Table>
<S>                                                                                  <C>
INVESTMENT INCOME:
   Dividends (net of withholding taxes of $59,858)                                   $      534,138
   Interest                                                                                      97
                                                                                     --------------
     Total investment income                                                                534,235
                                                                                     --------------
EXPENSES:
   Investment management fee                                                                242,485
   Administration fee                                                                       120,904
   Custodian fees and expenses                                                               85,730
   Audit and tax services                                                                    83,300
   Legal fees and expenses                                                                   75,177
   Reports and notices to shareholders                                                       49,843
   Insurance expense                                                                         39,625
   Directors' fees and expenses                                                              26,807
   Transfer agency fee and expenses                                                          15,781
   Other                                                                                     47,840
                                                                                     --------------
     Total expenses                                                                         787,492
                                                                                     --------------
Net investment loss                                                                        (253,257)
                                                                                     --------------
REALIZED AND UNREALIZED GAINS FROM INVESTMENT ACTIVITIES AND FOREIGN CURRENCY
  TRANSACTIONS:
   Net realized losses on investments                                                    (5,224,636)
   Net realized foreign currency transaction gains                                          209,459
   Net change in unrealized appreciation (depreciation) on investments in equity
    securities                                                                           21,082,931
   Net change in unrealized appreciation (depreciation) on assets and
    liabilities denominated in foreign currency                                              (2,396)
                                                                                     --------------
Net realized and unrealized gains from investment activities and foreign
  currency transactions                                                                  16,065,358
                                                                                     --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                 $   15,812,101
                                                                                     ==============
</Table>

                 See accompanying notes to financial statements.

                                       15
<Page>

STATEMENT OF CHANGES IN NET ASSETS

<Table>
<Caption>
                                                                                      FOR THE YEARS ENDED
                                                                                           OCTOBER 31,
                                                                                --------------------------------
                                                                                     2003              2002
                                                                                --------------    --------------
<S>                                                                             <C>               <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
   Net investment loss                                                          $     (253,257)   $     (421,926)
   Net realized gain (loss) on:
     Investments                                                                    (5,224,636)      (13,433,292)
     Foreign currency transactions                                                     209,459           (81,954)
   Net change in unrealized appreciation (depreciation) on:
     Investments in equity securities                                               21,082,931         2,524,336
     Translation of short-term investments and other assets and liabilities
       denominated in foreign currency                                                  (2,396)            7,749
                                                                                --------------    --------------
   Net increase (decrease) in net assets resulting from operations                  15,812,101       (11,405,087)
                                                                                --------------    --------------

NET ASSETS:
   Beginning of year                                                                49,106,271        60,511,358
                                                                                --------------    --------------
   End of year                                                                  $   64,918,372    $   49,106,271
                                                                                ==============    ==============
</Table>

                 See accompanying notes to financial statements.

                                       16
<Page>

THE JAPAN EQUITY FUND, INC.

NOTES TO FINANCIAL STATEMENTS

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

     The Japan Equity Fund, Inc. (the "Fund") was incorporated in Maryland on
July 12, 1990 under its former name "The Japan Emerging Equity Fund, Inc." and
commenced operations on July 24, 1992. It is registered with the Securities and
Exchange Commission as a closed-end, diversified management investment company.

     The following significant accounting policies are in conformity with
generally accepted accounting principles in the United States of America for
investment companies. Such policies are consistently followed by the Fund in the
preparation of its financial statements. The preparation of financial statements
in accordance with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
amounts and disclosures in the financial statements. Actual reporting results
could differ from those estimates.

     VALUATION OF INVESTMENTS--Securities which are listed on the Tokyo Stock
Exchange or listed on the over-the-counter market in Japan or listed on other
exchanges in Japan and for which market quotations are readily available are
valued at the last reported sales price available to the Fund at the close of
business on the day the securities are being valued or, lacking any such sales,
at the last available bid price. In instances where quotations are not readily
available or where the price as determined by the above procedures is deemed not
to represent fair market value, fair value will be determined in such manner as
the Board of Directors (the "Board") may prescribe. Short-term investments
having a maturity of 60 days or less are valued at amortized cost, except where
the Board determines that such valuation does not represent the fair value of
the investment. All other securities and assets are valued at fair value as
determined in good faith by, or under the direction of, the Board.

     FOREIGN CURRENCY TRANSLATION--The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities and other assets and liabilities stated in Japanese yen
are translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the rate of exchange
prevailing on the respective dates of such transactions. The resulting exchange
gains and losses are included in the Statement of Operations. The Fund does not
isolate the effect of fluctuations in foreign exchange rates from the effect of
fluctuations in the market price of securities.

     TAX STATUS--The Fund intends to continue to distribute substantially all of
its taxable income and to comply with the minimum distribution and other
requirements of the Internal Revenue Code applicable to regulated investment
companies. Accordingly, no provision for federal income or excise taxes is
required.

     The Fund is not subject to any Japanese income, capital gains or other
taxes except for withholding taxes on certain income, generally imposed at rates
of 10% on interest and dividends, paid to the Fund by Japanese corporations.

     INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date (the date upon which the order to buy or sell is
executed). Realized and unrealized gains and losses from security and foreign
currency transactions are calculated on the identified cost basis. Dividend
income and corporate actions are recorded generally on the ex-date, except for
certain dividends and corporate actions from Japanese securities which may be
recorded after the ex-date, as soon as the Fund acquires information regarding
such dividends or corporate actions. Interest income is recorded on an accrual
basis.

                                       17
<Page>

     DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS--The Fund records dividends and
distributions payable to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from generally accepted accounting principles. These book basis/tax
basis differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences do not require reclassifications. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.

INVESTMENT MANAGER AND INVESTMENT ADVISER

     The Fund has an Investment Management Agreement with Daiwa SB Investments
(U.S.A.) Ltd. (the "Manager"). Daiwa SB Investments Ltd. ("DSBI" or the
"Adviser"), an affiliate of the Manager, acts as the Fund's investment adviser
pursuant to an Investment Advisory Agreement between the Manager and DSBI. For
such investment services, the Fund is obligated to pay the Manager a monthly fee
at an annual rate of 0.60% of the first $20 million, 0.40% of the next $30
million and 0.20% of the excess over $50 million of the Fund's average weekly
net assets, of which fee 60% is paid by the Manager to DSBI.

     In addition, the Fund has agreed to reimburse the Manager and the Adviser
for all out-of-pocket expenses related to the Fund. For the year ended October
31, 2003, there were no out-of-pocket expenses incurred by the Manager or the
Adviser.

     At October 31, 2003, the Fund owed $23,022 to the Manager and the Manager
informed the Fund that it owed the Adviser $13,813.

     Brokerage commissions of $21,224 were paid by the Fund to Daiwa Securities
America, Inc., an affiliate of both the Manager and DSBI, in connection with
portfolio transactions during the year ended October 31, 2003. At October 31,
2003, the Fund had unsettled purchases of $487,305 and unsettled sales of
$913,349 with this affiliate, such amounts are included in "Payable for
securities purchased" and "Receivable for securities sold", respectively, in the
Statement of Assets and Liabilities.

ADMINISTRATOR AND CUSTODIAN AND OTHER RELATED PARTIES

     Daiwa Securities Trust Company ("DSTC") an affiliate of the Adviser,
provides certain administrative services to the Fund, for which the Fund pays to
DSTC a monthly fee at an annual rate of 0.20% of the first $60 million of the
Fund's average weekly net assets, 0.15% of the next $40 million and 0.10% of the
excess over $100 million, with a minimum annual fee of $120,000. In addition, as
permitted by the Administration Agreement, the Fund reimburses the Administrator
for its out-of-pocket expenses related to the Fund. For the year ended October
31, 2003, there were no out-of-pocket expenses incurred by the Administrator.

     DSTC also acts as custodian for the Fund's assets and has appointed
Sumitomo Mitsui Banking Corporation (the "Sub-Custodian"), an affiliate of the
Manager, to act as the sub-custodian for all of the cash and securities of the
Fund held in Japan. As compensation for its services as custodian, DSTC receives
a monthly fee and reimbursement of out-of-pocket expenses. Such expenses include
fees and out-of-pocket expenses of the Sub-

                                       18
<Page>

Custodian. During the year ended October 31, 2003, DSTC and the Sub-Custodian
earned $29,105 and $56,625, respectively, as compensation for custodial service
to the Fund.

     At October 31, 2003, the Fund owed $10,897 and $3,150 to DSTC for
administration and custodian fees, respectively, excluding fees and expenses of
$2,974 payable to the Sub-Custodian.

     During the year ended October 31, 2003, the Fund paid or accrued $75,177
for legal services in connection with the Fund's on-going operations to a law
firm of which the Fund's Assistant Secretary is a partner.

INVESTMENTS IN SECURITIES AND FEDERAL INCOME TAX MATTERS

     For federal income tax purposes, the cost of securities owned at October
31, 2003 was substantially the same as the cost of securities for financial
statement purposes. At October 31, 2003, the net unrealized appreciation of
investments for federal income tax purposes, excluding short-term securities, of
$5,708,823 was composed of gross appreciation of $8,779,851 for those
investments having an excess of value over cost, and gross depreciation of
$3,071,028 for those investments having an excess of cost over value. For the
year ended October 31, 2003, total aggregate purchases and sales of portfolio
securities, excluding short-term securities, were $42,867,805 and $43,850,776,
respectively.

     In order to present undistributed net investment income and accumulated net
realized loss on investments on the Statement of Assets and Liabilities that
more closely represent their tax character, certain adjustments have been made
to paid-in capital in excess of par value, undistributed net investment income
and accumulated net realized loss on investments.

     For the year ended October 31, 2003, the adjustments were to decrease net
investment loss by $253,257, increase accumulated net realized loss on
investments by $209,459 and decrease paid-in capital in excess of par by
$43,798, primarily relating to the Fund's net operating loss for the year ended
October 31, 2003 and the reclassification of realized foreign currency gains.
Net investment income, net realized losses and net assets were not affected by
this change.

     At October 31, 2003, the Fund had a remaining capital loss carryover of
$48,137,844, of which $6,264,639 expires in the year 2005, $16,909,841 expires
in the year 2006, $6,225,150 expires in the year 2009, $13,474,882 expires in
the year 2010 and $5,263,332 expires in the year 2011 available to offset future
net capital gains.

     As of October 31, 2003, the Fund had no distributable earnings.

CAPITAL STOCK

     There are 30,000,000 shares of $.01 par value common stock authorized. Of
the 10,815,688 shares of the Fund outstanding at October 31, 2003, Daiwa
Securities America Inc. an affiliate of the Manager, Adviser and DSTC owned
14,532 shares.

                                       19
<Page>

SUBSEQUENT EVENT

     On November 10, 2003, the Fund announced that it will issue to stockholders
of record as of December 4, 2003 (the "Record Date") one transferable right for
each share of common stock held (the "Offering"). Three rights will entitle the
holder to purchase one share of common stock at the subscription price. The
subscription price will not be determined until December 23, 2003, the
expiration date of the Offering (the "Expiration Date") and will equal 90% of
the average of the closing price of the Fund's common stock on the New York
Stock Exchange on the Expiration Date of the Offering and the four immediately
preceding trading days, with a requirement that the price be no lower than 95%
of the net asset value per share of common stock of the Fund at the Expiration
Date. If all subscription rights are exercised, the Fund will issue
approximately 3,605,229 shares of its common stock in the Offering.

                                       20
<Page>

THE JAPAN EQUITY FUND, INC.

FINANCIAL HIGHLIGHTS

Selected data for a share of capital stock outstanding during each year is
presented below:

<Table>
<Caption>
                                                                                   FOR THE YEARS ENDED OCTOBER 31,
                                                                      2003         2002         2001         2000         1999
                                                                    --------     --------     --------     --------     --------
<S>                                                                 <C>          <C>          <C>          <C>          <C>
Net asset value, beginning of year                                  $   4.54     $   5.59     $   8.35     $   9.39     $   6.08
                                                                    --------     --------     --------     --------     --------
Net investment loss                                                    (0.02)       (0.04)       (0.04)       (0.04)       (0.01)
Net realized and unrealized gains (losses) on investments and
  foreign currency transactions                                         1.48        (1.01)       (2.72)       (1.00)        3.32
                                                                    --------     --------     --------     --------     --------
Net increase (decrease) in net asset value resulting
  from operations                                                       1.46        (1.05)       (2.76)       (1.04)        3.31
                                                                    --------     --------     --------     --------     --------
Net asset value, end of year                                        $   6.00     $   4.54     $   5.59     $   8.35     $   9.39
                                                                    ========     ========     ========     ========     ========
Per share market value, end of year                                 $  7.160     $  4.150     $  4.990     $  7.063     $  9.813
                                                                    ========     ========     ========     ========     ========
Total investment return:
   Based on market price at beginning and end of year                  72.53%      (16.83)%     (29.35)%     (28.02)%      42.73%
   Based on net asset value at beginning and end of year               32.16%      (18.78)%     (33.05)%     (11.08)%      54.44%
Ratios and supplemental data:
   Net assets, end of year (in millions)                            $   64.9     $   49.1     $   60.5     $   90.3     $  101.6
   Ratios to average net assets of:
     Expenses                                                           1.50%        1.44%        1.12%        0.96%        1.08%
     Net investment loss                                               (0.48)%      (0.74)%      (0.51)%      (0.48)%      (0.11)%
Portfolio turnover                                                     84.00%       76.19%       63.39%       61.91%       58.70%
</Table>

                                       21
<Page>

THE JAPAN EQUITY FUND, INC.

REPORT OF INDEPENDENT AUDITORS

To The Shareholders and
Board of Directors of
The Japan Equity Fund, Inc.

     In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Japan Equity Fund, Inc. (the
"Fund") at October 31, 2003, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.


PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 3, 2003

                                       22
<Page>

THE JAPAN EQUITY FUND, INC.

TAX INFORMATION (UNAUDITED)

     The Fund is required by Subchapter M of the Internal Revenue Code of 1986,
as amended, to advise you within 60 days of the Fund's fiscal year end (October
31, 2003) as to the federal tax status of distributions received by you during
such fiscal year. There were no dividend payments or foreign tax credits with
respect to the fiscal year 2003.

     SHAREHOLDERS ARE STRONGLY ADVISED TO CONSULT THEIR OWN TAX ADVISERS WITH
RESPECT TO THE TAX CONSEQUENCES OF THEIR INVESTMENT IN THE FUND.

                                       23
<Page>

THE JAPAN EQUITY FUND, INC.

INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)

     The following table sets forth information concerning each of the Directors
and Officers of the Fund. The Directors of the Fund will serve for terms
expiring on the date of subsequent Annual Meetings of Stockholders in the year
2006 for Class I Directors, 2004 for Class II Directors and 2005 for Class III
Directors, or until their successors are duly elected and qualified.

<Table>
<Caption>
                                                                                                          NUMBER OF
                                                                                                          FUNDS IN
                                              PRINCIPAL OCCUPATION                                          FUND
                                            OR EMPLOYMENT DURING PAST                                    COMPLEX FOR
                                                 FIVE YEARS AND                         DIRECTOR OR         WHICH
  NAME (AGE) AND ADDRESS                        DIRECTORSHIPS IN                        OFFICER OF        DIRECTOR
   OF DIRECTORS/OFFICERS                     PUBLICLY HELD COMPANIES                    FUND SINCE       SERVES (1)
- --------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                <C>                     <C>
DIRECTORS

   Austin C. Dowling (71)         Retired; Director, The Thai Capital Fund, Inc.,        Class III           3
   1002 E Long Beach Boulevard    since 1990; Director, The Singapore Fund, Inc.,        Director
   North Beach, NJ 08008          since 2000.                                           since 1992

   Martin J. Gruber (65)          Professor of Finance, Leonard N. Stern School of   Class I Director        3
   229 South Irving Street        Business, New York University, since 1965;            since 1992
   Ridgewood, NJ 07450            Director, The Thai Capital Fund, Inc., since
                                  2000; Director, The Singapore Fund, Inc., since
                                  2000; Director, SG Cowen Income & Growth Fund,
                                  Inc., from 1986 to 2001; Director, SG Cowen
                                  Opportunity Fund, from 1987 to 2001; Director, SG
                                  Cowen Standby Reserve Fund Inc., from 1985 to
                                  2001; Director, SG Cowen Standby Tax Exempt
                                  Reserve Fund Inc., from 1986 to 2001; Trustee,
                                  Deutsche Asset Management BT Family of Funds,
                                  since 1992; Trustee, C.R.E.F., since 2001;
                                  Trustee, T.I.A.A., from 1996 to 2000.

   David G. Harmer (60)           Executive Director, Department of Community and    Class II Director       3
   4337 Bobwhite Court            Economic Development for the State of Utah since      since 1997
   Ogden, UT 84403                May 2002; Chairman, 2K2 Hosting Corporation, from
                                  April 2001 to April 2002; President, Jetway
                                  Systems, a division of FMC Corporation, from 1997
                                  until 2001; Director, The Thai Capital Fund,
                                  Inc., since 2000; Director, The Singapore Fund,
                                  Inc., since 1996.

 * Hiroshi Kimura (50)            Chairman and President, Daiwa Securities Trust         Chairman of         1
   One Evertrust Plaza            Company, since July 2001; Director and Senior         the Board and
   Jersey City, NJ 07302-3051     Vice President of Daiwa Securities Trust Company,   Class I Director
                                  from April 1999 to June 2001; Associate Director       since 2001
                                  of Daiwa Europe Bank, from April 1996 to March
                                  1999.

   Oren G. Shaffer (60)           Vice Chairman and Chief Financial Officer of       Class II Director       3
   1891 California Street         Qwest Communications International Inc., since        since 2000
   Denver, CO 80202               July 2002; Executive Vice President and Chief
                                  Financial Officer of Ameritech Corporation, from
                                  1994 to 2000; Director, The Thai Capital Fund,
                                  Inc., since 2000; Director, The Singapore Fund,
                                  Inc., since 1997.
</Table>

                                       24
<Page>

<Table>
<Caption>
                                                                                                          NUMBER OF
                                                                                                          FUNDS IN
                                              PRINCIPAL OCCUPATION                                          FUND
                                            OR EMPLOYMENT DURING PAST                                    COMPLEX FOR
                                                 FIVE YEARS AND                         DIRECTOR OR         WHICH
  NAME (AGE) AND ADDRESS                        DIRECTORSHIPS IN                        OFFICER OF        DIRECTOR
   OF DIRECTORS/OFFICERS                     PUBLICLY HELD COMPANIES                    FUND SINCE       SERVES (1)
- --------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                <C>                     <C>
OFFICERS

   Shunsuke Ichijo (50)           Chief Executive Officer and Director of Daiwa SB   President of the        --
   7-9, Nihonbashi 2-chome,       Investments since 1999; General Manager if            Fund since
   Chuo-ku, Tokyo 103-0027        International Division of DICAM Tokyo since 1996.        2000
   Japan

   John J. O'Keefe (44)           Vice President of the Fund Accounting Department    Vice President         --
   One Evertrust Plaza            of Daiwa Securities Trust Company since 2000;        and Treasurer
   Jersey City, NJ 07302-3051     Assistant Controller for Reserve Management           of the Fund
                                  Corporation from 1999 to 2000; Accounting Manager     since 2000
                                  for Prudential Investments from 1998 to 1999; and
                                  Assistant Vice President of Daiwa Securities
                                  Trust Company from 1990 to 1998; Vice President
                                  and Treasurer of The Thai Capital Fund, Inc. and
                                  The Singapore Fund, Inc., since 2000.

   Mariedor Pineda (29)           Production Analyst of Daiwa Securities Trust       Secretary of the        --
   One Evertrust Plaza            Company since 1999; Assistant Supervisor of           Fund since
   Jersey City, NJ 07302-3051     CAMBA-Park Slope Women's Shelter, from 1996 to           2003
                                  1999; Secretary of The Thai Capital Fund, Inc.
                                  and The Singapore Fund, Inc., since 2003.

   Laurence E. Cranch (56)        Partner in the law firm of Clifford Chance US LLP      Assistant           --
   200 Park Avenue                since 1980; Assistant Secretary of The Thai        Secretary of the
   New York, NY 10166             Capital Fund, Inc. and The Singapore Fund, Inc.,      Fund since
                                  since 1992.                                              1992
</Table>

- ----------
(1)  "Fund Complex" includes the Fund, The Thai Capital Fund, Inc., The
     Singapore Fund, Inc. and other investment companies advised by SCB Asset
     Management Co., Ltd., Daiwa SB Investments (H.K.) Ltd., DBS Asset
     Management (United States) Pte. Ltd., Daiwa SB Investments (Singapore)
     Ltd., Daiwa SB Investments (USA) Ltd., Daiwa SB Investments Ltd. or their
     respective affiliates.
*    Directors so noted are deemed by the Fund's counsel to be "interested
     persons" (as defined in the U.S. Investment Company Act of 1940, as
     amended). Mr. Kimura is deemed an interested person of the Fund because of
     his affiliation with Daiwa Securities Trust Company, an affiliate of the
     Fund's investment adviser, Daiwa SB Investments Ltd.

                                       25
<Page>

                 (This page has been left blank intentionally.)

<Page>

BOARD OF DIRECTORS
Hiroshi Kimura, CHAIRMAN
Austin C. Dowling
Martin J. Gruber
David G. Harmer
Oren G. Shaffer

OFFICERS
Shunsuke Ichijo
PRESIDENT
John J. O'Keefe
VICE PRESIDENT AND TREASURER
Mariedor Pineda
SECRETARY
Laurence E. Cranch
ASSISTANT SECRETARY

ADDRESS OF THE FUND
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, NJ 07302-3051

INVESTMENT MANAGER
Daiwa SB Investments (U.S.A.) Ltd.
INVESTMENT ADVISER
Daiwa SB Investments Ltd.
ADMINISTRATOR AND CUSTODIAN
Daiwa Securities Trust Company
TRANSFER AGENT AND REGISTRAR
PFPC Inc.
LEGAL COUNSEL
Clifford Chance US LLP
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP

Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that from time to time the Fund may purchase shares of its
common stock in the open market at prevailing market prices.

This report is sent to shareholders of the Fund for their information. It is not
a prospectus, circular or representation intended for use in the purchase or
sale of shares of the Fund or of any securities mentioned in the report.

                                  ANNUAL REPORT
                                OCTOBER 31, 2003

================================================================================


[JAPAN EQUITY FUND LOGO]


================================================================================

THE JAPAN EQUITY FUND, INC.
c/o Daiwa Securities Trust Company
One Evertrust Plaza
Jersey City, New Jersey 07302

INVESTMENT MANAGER
Daiwa SB Investments (U.S.A.) Ltd.

INVESTMENT ADVISER
Daiwa SB Investments Ltd.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>jeqncsrcertification-103103.txt
<DESCRIPTION>JEQ CERTIFICATIONS 10-31-03
<TEXT>
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John J. O'Keefe, certify that:

1. I have reviewed this report on Form N-CSR of The Japan
Equity Fund, Inc.

2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods
presented in this report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-2(c) under
the Investment Company Act of 1940) for the registrant and
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this report (the "Evaluation Date"); and

c) presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize, and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have
indicated in this report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.

Date: December 10, 2003

\s\John J. O'Keefe
- ---------------------------------------
John J. O'Keefe, Vice President & Treasurer



CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hiroshi Kimura, certify that:

1. I have reviewed this report on Form N-CSR of The Japan
Equity Fund, Inc.

2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods
presented in this report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Rule 30a-2(c) under
the Investment Company Act of 1940) for the registrant and
have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this report (the "Evaluation Date"); and

c) presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize, and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and

6. The registrant's other certifying officers and I have
indicated in this report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.

Date: December 10, 2003

\s\ Hiroshi Kimura
- ---------------------------------------
Hiroshi Kimura, Chairman



CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

The undersigned, the Vice President & Treasurer of The Japan
Equity Fund, Inc. (the "Fund"), with respect to the Form N-
CSR for the period ended October 31, 2003 as filed with the
Securities and Exchange Commission, hereby certifies,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. such Form N-CSR fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

2. the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition
and results of operations of the Funds.


Dated: December 10, 2003


/s/ John J. O'Keefe
- ----------------------------------
John J. O'Keefe

This certification is being furnished solely pursuant to 18
U.S.C. Section 1350 and is not being filed as part of the
Report or as a separate disclosure document.



CERTIFICATION
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

The undersigned, the Chairman of The Japan Equity Fund, Inc.
(the "Fund"), with respect to the Form N-CSR for the period
ended October 31, 2003 as filed with the Securities and
Exchange Commission, hereby certifies, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

1. such Form N-CSR fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

2. the information contained in such Form N-CSR fairly
presents, in all material respects, the financial condition
and results of operations of the Funds.


Dated: December 10, 2003


/s/ Hiroshi Kimura
- ----------------------------------
Hiroshi Kimura

This certification is being furnished solely pursuant to 18
U.S.C. Section 1350 and is not being filed as part of the
Report or as a separate disclosure document.



EXHIBIT B(1)


NYA 612686.1
EXHIBIT B(2)



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>jeqncsritems2-10_103103.txt
<DESCRIPTION>JEQ ITEM 2-10 10-31-03
<TEXT>

ITEM 2. CODE OF ETHICS. Attached Exhibit 10 (a).

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Attached Exhibit 10
(b).

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not
Applicable.

ITEMS 5-6. (RESERVED)

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES
FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Attached
Exhibit 10 (c) and Exhibit 10 (d)

ITEMS 8. (RESERVED)

ITEM 9. CONTROLS AND PROCEDURES.

(a) Based on an evaluation of the registrant's
disclosure controls and procedures as of December 3,
2003,  the disclosure controls and procedures are
reasonably designed to ensure that the information
required in filings on Forms N-CSR is recorded,
processed, summarized, and reported on a timely basis.

(b) There were no significant changes in the
registrant's internal controls or in other factors
that could affect these controls subsequent to the
date of our evaluation, including any corrective
actions with regard to significant deficiencies and
material weaknesses.

ITEMS 10. EXHIBITS. File the exhibits listed below as part of
this Form. Letter or number the exhibits in the sequence
indicated.

(a) Any code of ethics, or amendment thereto, that is
the subject of the disclosure required by Item 2, to
the extent that the registrant intends to satisfy the
Item 2 requirements through filing of an exhibit:

(b) A separate certification for each principal
executive officer and principal financial officer of
the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2) in the exact form set forth below:
Attached hereto.




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.

(Registrant) 						The Japan Equity
Fund, Inc.


By (Signature and Title)* 				\s\ John J.
O'Keefe
- --------------------------
- ---------
John J. O'Keefe, Vice
President & Treasurer

Date: December 19, 2003

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 persons on behalf of
the registrant and in the capacities and on the dates
indicated.

By (Signature and Title)* 	\s\ John J. O'Keefe
- --------------------------
John J. O'Keefe, Vice
President & Treasurer

Date: December 19, 2003

By (Signature and Title)* 	\s\ Hiroshi Kimura
- --------------------------
Hiroshi Kimura, Chairman

Date: December 19, 2003

* Print the name and title of each signing officer under his
or her signature.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>jeqncsrmgrcert103103.txt
<DESCRIPTION>JEQ MGRCERT 10-31-03
<TEXT>
THE JAPAN EQUITY FUND, INC.
INVESTMENT ADVISER
CERTIFICATION

I, Kazuhiko Hosaka, Senior Portfolio Manager of Daiwa SB
Investments Ltd. (the "Adviser"), certify to the best of my
knowledge that:

1.  I am responsible for providing The Japan Equity Fund,
Inc. (the "Fund") with certain information identified in the
N-CSR report that is attached as Schedule A hereto, which
information I understand is used by the Fund in compiling its
financial statements and preparing its annual and semi-annual
reports.

2.  Such information is generated through the use of
practices and procedures that are widely accepted in the
investment management industry and have a sound basis in
investment management fundamentals.  The information is
provided to the Fund only after sufficient due diligence has
been conducted.

3.  I am further responsible for establishing and maintaining
disclosure controls and procedures for the Adviser, such
disclosure controls and procedures have been designed to
ensure that the information identified in the schedule is
made known to me, and I have evaluated the effectiveness of
the Adviser's disclosure controls and procedures within 90
days prior to the filing date of the Report.




Dated: December 19, 2003




/s/ Kazuhiko Hosaka
Kazuhiko Hosaka
Senior Portfolio Manager






NYA 614332.3



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>7
<FILENAME>jeqncsritem3-103103.txt
<DESCRIPTION>JEQ ITEM3 10-31-03
<TEXT>
Exhibit 10 (b)

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT

The registrant's board of directors has determined that the
registrant has at least one audit committee financial expert
serving on its audit committee.  The audit committee
financial expert is Oren G. Shaffer who is "independent" for
purposes of this item.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>8
<FILENAME>jeqncsritem2-103103.txt
<DESCRIPTION>JEQ ITEM2 10-31-03
<TEXT>
EXHIBIT 10 (A)
ITEM 2. CODE OF ETHICS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL
OFFICERS

I.	This Code of Ethics (the "Code") for The Thai Capital
Fund, Inc., The Japan Equity Fund, Inc. and The
Singapore Fund, Inc. (each a "Fund" and collectively the
"Funds") applies to each Fund's President and Treasurer
(or persons performing similar functions) ("Covered
Officers") for the purpose of promoting:
    .	honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of
interest between personal and professional
relationships.
    . full, fair, accurate, timely and understandable
disclosure in reports and documents that a Fund
files with, or submits to, the Securities and
Exchange Commission ("SEC") and in other public
communications made by a Fund;
    . compliance with applicable laws and governmental
rules and regulations;
    . prompt internal reporting of violations of the Code
to an appropriate person or persons identified in
the Code; and
    . accountability for adherence to the Code.
	Each Covered Officer should adhere to a high standard of
business ethics and should be sensitive to situations that
may give rise to actual as well as apparent conflicts of
interest.  A Fund will expect all Covered Officers to comply
at all times with the principles in this Code. A violation of
this Code by an employee is grounds for disciplinary action
up to and including discharge and possible legal prosecution.
Any question about the application of the Code should be
referred to the Audit Committee of the Fund's Board of
Directors ( the "Audit Committee").

II.	Covered Officers Should Handle Ethically Actual and
Apparent Conflicts of Interest
Overview.  A "conflict of interest" occurs when a
Covered Officer's private interest interferes with the
interests of, or his service to, a Fund.  For example, a
conflict of interest would arise if a Covered Officer, or a
member of his family, receives improper personal benefits as
a result of his position with a Fund.
	Certain conflicts of interest arise out of the
relationships between Covered Officers and a Fund and already
are subject to conflict of interest provisions in the
Investment Company Act of 1940 (the "Investment Company Act")
and the Investment Advisers Act of 1940 (the "Investment
Advisers Act").  For example, Covered Officers may not
individually engage in certain transactions (such as the
purchase or sale of securities or other property) with a Fund
because of their status as "affiliated persons" of a Fund.
The compliance programs and procedures of a Fund and the
Fund's Investment Manager and Investment Adviser are designed
to prevent, or identify and correct, violations of these
provisions.  Certain conflicts of interest also arise out of
the personal securities trading activities of the Covered
Officers and the possibility that they may use information
regarding a Fund's securities trading activities for their
personal benefit.  Each Fund's Code of Ethics under Rule 17j-
1 under the Investment Company Act is designed to address
these conflicts of interest.  This Code does not, and is not
intended to, replace these programs and procedures or a
Fund's Rule 17j-1 Code of Ethics, and this Code's provisions
should be viewed as being additional and supplemental to such
programs, procedures and code.
Although typically not presenting an opportunity for
improper personal benefit, conflicts arise from, or as a
result of, the contractual relationship between a Fund and
its Investment Adviser or Investment Manager of which the
Covered Officers are also officers or employees.  As a
result, this Code recognizes that the Covered Officers will,
in the normal course of their duties (whether formally for a
Fund or for its Investment Adviser or Investment Manager, or
for all parties), be involved in establishing policies and
implementing decisions that will have different effects on
the Investment Adviser or Investment Manager and a Fund.  The
participation of the Covered Officers in such activities is
inherent in the contractual relationship between a Fund and
its Investment Adviser or Investment Manager and is
consistent with the performance by the Covered Officers of
their duties as officers of a Fund.  Thus, if performed in
conformity with the provisions of the Investment Company Act
and the Investment Advisers Act, such activities will be
deemed to have been handled ethically.  In addition, it is
recognized by a Fund's Board of Directors (the "Board") that
the Covered Officers may also be officers or employees of one
or more other investment companies covered by other codes.
Each Covered Officer must not:
    . use his personal influence or personal
relationships improperly to influence investment
decisions or financial reporting by a Fund whereby
the Covered Officer would benefit personally to the
detriment of a Fund;
    . cause a Fund to take action, or fail to take
action, for the individual personal benefit of the
Covered Officer rather than the benefit of the
Fund; and
    . use material non-public knowledge of portfolio
transactions made or contemplated for, or actions
proposed to be taken by, a Fund to trade personally
or cause others to trade personally in
contemplation of the market effect of such
transactions.
Each Covered Officer must, at the time of signing this
Code, report all material business affiliations outside a
Fund and must update the report annually.
	Covered Officers should avoid situations which involve
the appearance of, or potential for, conflicts of interest.
Examples of these situations include:
    . accepting directly or indirectly, anything of
value, including gifts and gratuities in excess of
$100 per year from any person or entity with which
a Fund has current or prospective business
dealings, not including occasional meals or tickets
to theatre or sporting events or other similar
entertainment, provided it is business-related,
reasonable in cost, appropriate as to time and
place and not so frequent as to raise any question
of impropriety;
    . any ownership interest in, or any consulting or
employment relationship with, any of a Fund's
service providers, other than its Investment
Adviser or Investment Manager or any affiliated
person thereof; and
    . a direct or indirect financial interest in
commissions, transaction charges or spreads paid by
a Fund for effecting portfolio transactions or for
selling or redeeming shares other than an interest
arising from the Covered Officer's employment, such
as compensation or equity ownership.
	In situations involving a Covered Officer which involve
the appearance of, or the potential for, conflicts of
interest, but where the Covered Officer believes that no
significant conflict of interest exist, the Covered Officer
must obtain prior written approval from the Audit Committee
before becoming involved in that situation.  No such approval
shall be considered a waiver of this Code.
III.	Disclosure and Compliance
    . Each Covered Officer should familiarize himself
with the disclosure and compliance requirements
generally applicable to a Fund;
    . Each Covered Officer should not knowingly
misrepresent, or cause others to misrepresent,
facts about a Fund to others, whether within or
outside a Fund, including to a Fund's directors and
auditors, or to governmental regulators and self-
regulatory organizations;
    . Each Covered Officer should, to the extent
appropriate within his area of responsibility,
consult with other officers and employees of a Fund
and its Investment Adviser or Investment Manager
with the goal of promoting full, fair, accurate,
timely and understandable disclosure in the reports
and documents a Fund files with, or submits to, the
SEC and in other public communications made by a
Fund; and
    . It is the responsibility of each Covered Officer to
promote compliance with the standards and
restrictions imposed by applicable laws, rules and
regulations.
IV.	Reporting and Accountability
Each Covered Officer must:
    . upon adoption of the Code or (thereafter as
applicable, upon becoming a Covered Officer),
affirm in writing to the Board that he has
received, read and understands the Code;
    . annually thereafter affirm to the Board that he has
complied with the requirements of the Code;
    . not retaliate against any other Covered Officer or
any employee of a Fund or their affiliated persons
for reports of potential violations that are made
in good faith; and
    . notify the Audit Committee promptly if he knows of
any violation of this Code.  Failure to do so is
itself a violation of this Code.
The Audit Committee is responsible for applying this
Code to specific situations in which questions are presented
under it and has the authority to interpret this Code in any
particular situation.  Any waivers sought by a Covered
Officer must be considered by the Audit Committee.
A copy of this Code shall be delivered to each employee
of a Fund and each employee of its Investment Adviser and
Investment Manager annually together with a memorandum
requesting that any violations of the Code be communicated
immediately to the Audit Committee.
Each Fund will follow these procedures in investigating
and enforcing this Code:
    . the Audit Committee will take all appropriate
action to investigate any potential violations
reported to it;
    . if, after such investigation, the Audit Committee
believes that no violation has occurred, the Audit
Committee is not required to take any further
action;
    . if the Audit Committee determines that a violation
has occurred, it will consider appropriate action,
which may include review of, and appropriate
modifications to, applicable policies and
procedures; notification to appropriate personnel
of the Investment Adviser or its board; or a
recommendation to dismiss the Covered Officer;
    . the Audit Committee will be responsible for
granting waivers of this Code, as appropriate; and
    . any changes to or waivers of this Code will, to the
extent required, be disclosed as provided by SEC
rules.
V.	Changes To or Waivers of the Code
	No change to or waiver of any provision of this Code
will be effective until a Fund discloses the nature of any
amendment to, or waiver from, a provision of the Code in its
Form N-CSR, or on its website within five business days
following the date of the amendment or waiver if this method
of disclosure has been established in its Form N-CSR and made
available on its website for twelve months.  Any waiver of
provisions of this Code will be reported in filings with the
SEC and otherwise reported to a Fund's stockholders to the
full extent required by the rules of the SEC and by any
applicable rules of any securities exchange on which a Fund's
securities are listed.

VI.	Other Policies and Procedures
This Code shall be the sole code of ethics adopted by
each Fund for purposes of Section 406 of the Sarbanes-Oxley
Act of 2002 and the rules and forms applicable to registered
investment companies thereunder.  Insofar as other policies
or procedures of a Fund or its Investment Adviser, Investment
Manager or other service providers govern or purport to
govern the behavior or activities of the Covered Officers who
are subject to this Code, they are superseded by this Code to
the extent that they conflict with the provisions of this
Code.
VII.	Amendments
	Any amendments to this Code must be approved or ratified
by a majority vote of the Audit Committee and the Board,
including a majority of directors who are not interested
persons as defined in the Investment Company Act.
VIII.	Confidentiality
All reports and records prepared or maintained pursuant
to this Code will be considered confidential and shall be
maintained and protected accordingly.  Except as otherwise
required by law or this Code, such matters shall not be
disclosed to anyone other than the Audit Committee, the
Board, the Fund and its counsel and its Investment Adviser
and Investment Manager and their respective counsel.



IX.	Internal Use
The Code is intended solely for the internal use by a
Fund and does not constitute an admission, by or on behalf of
a Fund, as to any fact, circumstance or legal conclusion.

I have read and understand the terms of the Code.  I
recognize the responsibilities and obligations incurred by me
as a result of my being subject to the Code.  I hereby agree
to abide by the Code.

_________________________
Date:_____________________


(. cont'd)
(cont'd)


17145626.1 99557753



17145626.1 99557753
8


NYA 643526.3
DRAFT
17145626.1 99557753




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>9
<FILENAME>jeqncsritem7-103103.txt
<DESCRIPTION>JEQ ITEM7 10-31-03
<TEXT>

Exhibit 10 (c)

ITEM 7.  PROXY VOTING PROCEDURES

The registrant has delegated to its investment manager the
voting of proxies relating to the registrant's portfolio
securities. The policies and procedures used by the
investment manager to determine how to vote proxies relating
to the registrant's portfolio securities, including the
procedures used when a vote presents a conflict of interest
involving the investment manager, are contained in the
investment manager's Proxy Voting Guidelines, which are
attached hereto as Exhibit 10 (d).

The Japan Equity Fund, Inc.
Proxy Voting Policy and Procedures


The Board of Directors of The Japan Equity Fund, Inc. (the
"Fund") hereby adopts the following policy and procedures
with respect to voting proxies relating to Fund securities
managed by Daiwa SB Investments (USA) Ltd. (the "Investment
Manager").

I.	Policy

It is the policy of the Board of Directors of the Fund (the
"Board") to delegate the responsibility for voting proxies
relating to securities held by the Fund to the Investment
Manager as part of the Manager's general management of the
Fund's assets, subject to the Board's continuing oversight.
The Board of Directors of the Fund hereby delegates such
responsibility to the Investment Manager, and directs the
Investment Manager to vote proxies relating to Fund portfolio
securities managed by the Investment Manager consistent with
the duties and procedures set forth below.  The Investment
Manager may retain one or more vendors to review, monitor and
recommend how to vote proxies in a manner consistent with the
duties and procedures set forth below, to ensure such proxies
are voted on a timely basis and to provide reporting and/or
record retention services in connection with proxy voting for
the Fund.

II.	Fiduciary Duty

The right to vote a proxy with respect to securities held by
the Fund is an asset of the Fund.  The Investment Manager, to
which authority to vote on behalf of the Fund is delegated,
acts as a fiduciary of the Fund and must vote proxies in a
manner consistent with the best interest of the Fund and its
shareholders.  In discharging this fiduciary duty, the
Investment Manager must maintain and adhere to its policies
and procedures for addressing conflicts of interest and must
vote in a manner substantially consistent with its policies,
procedures and guidelines, as presented to the Board.

III.	Procedures

The following are the procedures adopted by the Board for the
administration of this policy.

	A.  Review of Investment Manager's Proxy Voting
Procedures.  The Investment Manager shall present to the
Board their policies, procedures and other guidelines
for voting proxies at least annually, and must notify
the Board promptly of material changes to any of these
documents, including changes to policies addressing
conflicts of interest.

	B.  Voting Record Reporting.  The Investment Manager
shall provide the voting record information necessary
for the completion and filing of Form-NPX to the Fund at
least annually.  Such voting record information shall be
in a form acceptable to the Fund and shall be provided
at such time(s) as are required for the timely filing of
Form-NPX and at such additional time(s) as the Fund and
the Investment Manager may agree from time to time.
With respect to those proxies that the Investment
Manager has identified as involving a conflict of
interest , the Investment Manager shall submit a separate
report indicating the nature of the conflict of interest
and how that conflict was resolved with respect to the
voting of the proxy.

	C.  Record Retention.  The Investment Manager shall
maintain such records with respect to the voting of
proxies as may be required by the Investment Advisers
Act of 1940 and the rules promulgated thereunder or by
the Investment Company Act of 1940 and the rules
promulgated thereunder.

	D.  Conflicts of Interest.  Any actual or potential
conflicts of interest between the Investment Manager and
the Fund's shareholders arising from the proxy voting
process will be addressed by the Investment Manager and
the Investment Manager's application of its proxy voting
procedures pursuant to the delegation of proxy voting
responsibilities to the Investment Manager.  In the
event that the Investment Manager notifies the
officer(s) of the Fund that a conflict of interest
cannot be resolved under the Investment Manager's Proxy
Voting Procedures, such officer(s) are responsible for
notifying the Chairman of the Board of the Fund of the
irreconcilable conflict of interest and assisting the
Chairman with any actions he determines are necessary.

IV.	Revocation

The delegation by the Board of the authority to vote proxies
relating to securities of the Fund is entirely voluntary and
may be revoked by the Board, in whole or in part, at any
time.

V.	Annual Filing

The Fund shall file an annual report of each proxy voted with
respect to securities of the Fund during the twelve-month
period ended June 30 on Form N-PX not later than August 31 of
each year.

VI.	Disclosures

	A.	The Fund shall include in its annual report filed
on Form N-CSR:

	1.  a description of this policy and of the
policies and procedures used by the Fund and the
Investment Manager to determine how to vote proxies
relating to portfolio securities or copies of such
policies and procedures; and

	2.  a statement disclosing that a description of
the policies and procedures used by or on behalf of
the Fund to determine how to vote proxies relating
to securities of the Fund is available without
charge, upon request, by calling the Fund's toll-
free telephone number; through a specified Internet
address, if applicable; and on the SEC's website;
and

	3.  a statement disclosing that information
regarding how the Fund voted proxies relating to
Fund securities during the most recent 12-month
period ended June 30 is available without charge,
upon request, by calling the Fund's toll-free
telephone number; or through a specified Internet
address; or both; and on the SEC's website.

VII.	Review of Policy

The Board shall review from time to time this policy to
determine its sufficiency and shall make and approve any
changes that it deems necessary from time to time.


Adopted:    November 25, 2003

Exhibit 10 (d)

ITEM 7.  Proxy Voting Procedures  (continued)

Proxy voting policy for Daiwa SB Investments (USA) Ltd.

Statement of Policies and Procedures for
Voting Proxies

INTRODUCTION
As a registered investment adviser, Daiwa SB Investments
(USA) Ltd. ("Daiwa," "we" or "us") has a fiduciary duty to
act solely in the best interests of our clients.  As part of
this duty, we recognize that we must exercise voting rights
in the best interests of our clients.
Daiwa recognizes the importance of good corporate
governance in ensuring that management and boards of
directors fulfill their obligations to shareholders.  As part
of our investment process, we take into account the attitudes
of management and boards of directors on corporate governance
issues when deciding whether to invest in a company.
Daiwa is a global investment manager, and invests
significantly in emerging markets.  It should be noted that
protection for shareholders may vary significantly from
jurisdiction to jurisdiction, and in some cases may be
substantially less than in the U.S. or developed countries.
This statement is intended to comply with Rule 206(4)-6
of the Investment Advisers Act of 1940.  It sets forth the
policy and procedures of Daiwa for voting proxies for our
clients, including investment companies registered under the
Investment Company Act of 1940.
PROXY VOTING POLICIES
It is the general policy of Daiwa to support management
of the companies in which it invests and will cast votes in
accordance with management's proposals.  However, Daiwa
reserves the right to depart from this policy in order to
avoid voting decisions that we believe may be contrary to our
clients' best interests.
Elections of Directors:  In many instances, election of
directors is a routine voting issue.  Unless there is a proxy
fight for seats on the Board or we determine that there are
other compelling reasons for withholding votes for directors,
we will vote in favor of the management proposed slate of
directors.  That said, we believe that directors have a duty
to respond to shareholder actions that have received
significant shareholder support.  We may withhold votes for
directors that fail to act on key issues such as failure to
implement proposals to declassify boards, failure to
implement a majority vote requirement, failure to submit a
rights plan to a shareholder vote and failure to act on
tender offers where a majority of shareholders have tendered
their shares.
Appointment of Auditors:  The selection of an
independent accountant to audit a company's financial
statements is generally a routine business matter.  Daiwa
believes that management remains in the best position to
choose the accounting firm and will generally support
management's recommendation.
Changes in Capital Structure:  Changes in a company's
charter, articles of incorporation or by-laws are often
technical and administrative in nature.  Absent a compelling
reason to the contrary, Daiwa will cast its votes in
accordance with the company's management on such proposals.
However, we will review and analyze on a case-by-case basis
any non-routine proposals that are likely to affect the
structure and operation of the company or have a material
economic effect on the company.
Corporate Restructurings,  Mergers and Acquisitions:
Daiwa believes proxy votes dealing with corporate
reorganizations are an extension of the investment decision
and will take account of our investment process policy in
deciding how to vote.
Corporate Governance:  Daiwa recognizes the importance
of good corporate governance in ensuring that management and
the board of directors fulfil their obligations to the
shareholders.  We generally favor proposals promoting
transparency and accountability within a company.
Social and Corporate Responsibility:  Daiwa recognizes
the importance of supporting sound and responsible policies
in relation to social, political and environmental issues.
However, in the interests of shareholders, we reserve the
right to vote against proposals that are unduly burdensome or
result in unnecessary and excessive costs to the company.  We
may abstain from voting on social proposals that do not have
a readily determinable financial impact on shareholder value.
Executive Compensation:  Daiwa believes that company
management and the compensation committee of the board of
directors should, within reason, be given latitude to
determine the types and mix of compensation and benefit
awards offered.  Whether proposed by a shareholder or
management, we will review proposals relating to executive
compensation plans and, if deemed excessive, may vote against
the proposals.
PROXY VOTING PROCEDURES
Proxy voting
Our portfolio management team is responsible for the
coordination of Daiwa's proxy voting.  They liaise with the
Product managers and/or the Proxy voting committee to
ascertain how Daiwa will vote.  They will then instruct the
relevant Custodians.  The portfolio management team is also
responsible for ensuring that full and adequate records of
proxy voting are kept.
The Product managers will implement the Proxy voting
policies by instructing proxy voting in accordance with the
general principles contained herein.
Proxy Voting Committee
We have formed a Proxy Voting Committee to regularly
review our general proxy policies and consider specific proxy
voting matters as and when deemed necessary.  Members of the
committees include senior investment personnel and
representatives of the Legal & Compliance Department.  The
committee may also evaluate proxies where we face a material
conflict of interest (as discussed below).
Conflicts of Interest
Daiwa recognizes that there is a potential conflict of
interest when we vote a proxy solicited by an issuer with
whom we have any material business or personal relationship
that may affect how we vote on the issuer's proxy.  We
believe that oversight by the proxy voting committee ensures
that proxies are voted with only our clients' best interests
in mind.  In order to avoid any perceived conflict of
interests, the following procedures have been established for
use when we encounter a potential conflict.
	The portfolio management team will refer to the Legal
and
compliance team any proxy votes that are issued by existing
clients or where Daiwa holds a significant voting percentage
of the company.  The Legal and compliance team will make the
initial determination about whether a material conflict of
interest exists based on the facts and circumstances of each
particular situation.
If our proposed vote is consistent with our stated proxy
voting policy, no further review is necessary.
If our proposed vote is contrary to our stated proxy
voting policy but is also contrary to management's
recommendation, no further review is necessary.
If our proposed vote is contrary to our stated proxy
voting policy and is consistent with management's
recommendation, the proposal is escalated to the
proxy committee for final review and determination.
Proxies of Certain Non-U.S. Issuers
Proxy voting in certain countries requires "share
blocking."  That is, shareholders wishing to vote their
proxies must deposit their shares shortly before the date of
the meeting (usually one-week) with a designated depositary.
During this blocking period, shares that will be voted at the
meeting cannot be sold until the meeting has taken place and
the shares are returned to the clients' custodian banks.
Daiwa may determine that the value of exercising the vote
does not outweigh the detriment of not being able to transact
in the shares during this period.  Accordingly, if share
blocking is required we may abstain from voting those shares.
In such a situation we would have determined that the cost of
voting exceeds the expected benefit to the client.
PROXY VOTING RECORD
Clients may obtain information on how Daiwa voted with
respect to their proxies by contacting our Client services
team at Daiwa SB Investments (USA) Ltd.. 32 Old Slip, 11th
Floor, New York, New York, Tel No. 212-612-8500, Fax No. 212-
612-8518/8519 or email d_diaz@dsbiusa.net /
m_gugliotta@dsbiusa.net.


   As it is used in this document, the term "conflict of
interest" refers to a situation in which the Investment
Manager or affiliated persons of the Investment Manager have
a financial interest in a matter presented by a
proxy other than the obligation they incur as Investment
Manager to the Fund which could potentially
compromise the Investment Manager's independence of judgment
and action with respect to the voting of
the proxy.

    The Fund must file its first report on Form N-PX not
later than August 31, 2004, for the twelve-month
period beginning July 1, 2003, and ending June 30, 2004.


1

5

NYA 639896.1



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