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 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 generally accepted accounting principles
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 First Section of the Tokyo Stock
Exchange 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 othe