THE JAPAN FUND, INC.
Two International Place
Boston, MA 02110
October 28, 1996
Dear Japan Fund Shareholder,
The Japan Fund recently undertook a review of average account sizes and
determined that administrative and recordkeeping costs for smaller accounts are
contributing to higher fund expenses for all shareholders. As a result, the Fund
plans to institute higher account minimums and a new sub-minimum account fee
effective January 1, 1997. Our purpose in writing to you is to outline these
changes and give you sufficient time to meet the new minimum should you be
affected.
Effective January 1, 1997, the initial investment and the minimum account
balance for regular accounts will increase from $1,000 to $2,500. The subsequent
minimum investment will remain at $100. The initial investment and minimum
account balance for fiduciary accounts such as IRAs will increase from $500 to
$1,000 per fund account. The subsequent minimum investment will remain at $50. A
shareholder, however, may open an account at the current minimum -- $1,000 for a
regular account and $500 for an IRA -- by establishing a regular investment
program, such as our Automatic Investment Plan (AIP), of at least $100 a month
for a regular account and $50 a month for an IRA.
Beginning next year, we also will be instituting a sub-minimum account fee,
which will be returned to the Fund to offset the higher administrative and
recordkeeping expenses associated with small accounts. Regular accounts under
$2,500 that do not have an automatic investment plan in place may be assessed an
annual $10 per fund account charge. The sub-minimum fee will not apply to IRAs
and other fiduciary accounts. We will contact those shareholders who are
affected by the increase prior to assessing any sub-minimum account fees.
If your account balance currently falls below the new minimum, there are a
number of ways you can avoid paying the sub-minimum account fee.
o Take advantage of an automatic investment plan. If your account meets
the current minimum -- $1,000 for a regular account and $500 for an
IRA -- we will waive the fee if a regular investment program is
established. The monthly contribution should be at least $100 a month
for a regular account and $50 a month for an IRA.
o Consider consolidating smaller accounts. Our representatives are
available to help you choose appropriate Scudder funds and complete
any transactions.
o Increase your account balance to meet the new minimum. You may simply
decide to increase your account balance by check at this time.
These account policy changes are detailed in the prospectus supplement on the
reverse side, which we encourage you to read carefully. Please contact a Japan
Fund representative at 1-800-53-JAPAN if you have any questions or would like
help choosing a course of action.
Sincerely,
/s/Lynn Birdsong
Lynn Birdsong
Lynn Birdsong is president of The Japan Fund and a senior vice president of
Scudder Investor Services, Inc., Distributor.
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THE JAPAN FUND, INC.
Supplement dated October 28, 1996 for
Prospectus dated May 1, 1996
The Directors of The Japan Fund, Inc. have voted to change the minimum
shareholder account size, effective January 1, 1997. On that date, the new
account minimums will be in effect, and all references to initial purchases and
minimum account size will be modified, as described below.
The following text replaces the section in "Transaction information"
entitled Minimum balances, page 21.
Minimum balances
Shareholders are required to make an initial investment worth at least
$2,500, while the minimum subsequent investment will remain at $100. The initial
investment and minimum account balance for fiduciary accounts such as IRAs will
increase from $500 to $1,000 per fund account, while the minimum subsequent
investment will remain at $50. A shareholder may open a regular account with a
minimum of $1,000, if an investment program of at least $100 per month is
established or may open a fiduciary account with a minimum of $500, if an
investment program of at least $50 per month is established. Scudder retirement
plans and certain other accounts have similar or lower minimum balance
requirements. These changes may be amended by the Board of Directors.
Shareholders with non-fiduciary accounts who maintain an account
balance of less than $2,500 in the Fund, without establishing a regular
investment program may be assessed an annual $10.00 per fund charge with the fee
to be paid to the Fund. The $10.00 charge will not apply to shareholders with a
combined household account balance (same surname, same address) in any of the
Scudder Funds of $25,000 or more. The Fund reserves the right, following 60
days' written notice to shareholders, to redeem all shares in accounts below
$250, where a reduction in value has occurred due to a redemption or exchange
out of the account. The shareholder may restore the share balance to $250 or
more during the 60-day notice period and must maintain it at no lower than that
minimum to avoid involuntary redemption. The Fund will mail the proceeds of the
redeemed account to the shareholder. Reductions in value that result solely from
market activity will not trigger an involuntary redemption. Retirement accounts
and certain other accounts will not be assessed the $10.00 charge or be subject
to automatic liquidation.
The following text is added to the section "Transaction information."
Third party transactions
If purchases and redemptions of Fund shares are arranged and settlement
is made at an investor's election through a member of the National Association
of Securities Dealers, Inc., other than Scudder Investor Services, Inc., that
member may, at its discretion, charge a fee for that service.
October 28, 1996
