THE JAPAN FUND, INC.
December 31, 1997
Dear Japan Fund Shareowner,
On the reverse side, you will find language supplementing The Japan Fund,
Inc.'s prospectus. As it details, the Fund's investment adviser has changed its
name to Scudder Kemper Investments, Inc., from Scudder, Stevens & Clark, Inc.
This change is pursuant to the acquisition of a majority interest in Scudder,
Stevens & Clark, Inc. by Zurich Insurance Company, and the combining of
Scudder's business with that of Zurich Kemper Investments, Inc.
We thank you for your continued investment in the Fund, and encourage you
to contact a Japan Fund representative at 1-800-53-JAPAN with any questions.
Sincerely,
/s/Lynn S. Birdsong
Lynn S. Birdsong
President, The Japan Fund, Inc.
Vice President, Scudder Investor Services, Inc.
This letter is for explanatory purposes and is not part of
the prospectus supplement on the following pages.
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THE JAPAN FUND, INC.
Supplement to Prospectus
Dated May 1, 1997
The Fund's investment adviser, Scudder, Stevens & Clark, Inc. ("Scudder"), and
Zurich Insurance Company ("Zurich"), an international insurance and financial
services organization, have formed a new global investment organization by
combining Scudder's business with that of Zurich's subsidiary, Zurich Kemper
Investments, Inc., and Scudder has changed its name to Scudder Kemper
Investments, Inc. ("Scudder Kemper"). As a result of the transaction, Zurich
owns approximately 70% of Scudder Kemper, with the balance owned by Scudder
Kemper's officers and employees. Scudder Kemper now manages in excess of $200
billion in assets.
Following the transaction, the Scudder Family of Funds will continue to be pure
no-load. The Scudder Family of Funds consists of those Funds or classes of Funds
advised by Scudder Kemper which are offered without commissions to purchase or
redeem shares or to exchange from one Fund to another.
The transaction between Scudder and Zurich resulted in the termination of the
Fund's investment management agreement with Scudder. However, a new investment
management agreement between the Fund and Scudder Kemper was approved by the
Board of Directors. A special meeting of stockholders (the "Special Meeting")
was held in October, 1997, at which time the stockholders also approved a new
investment management agreement. The new investment management agreement is
effective as of December 31, 1997 and will be in effect for an initial term
ending on the same date as would the previous investment management agreement.
The Fund's Investment Management Agreement is the same in all material respects
as the previous investment management agreement, except that Scudder Kemper is
the new investment adviser to the Fund.
The Fund's fundamental policies have been amended by a vote of stockholders at
the Fund's Special Meeting. Following is a list of the Fund's amended and
restated fundamental policies. As a matter of fundamental policy, the Fund will
not:
o borrow money, except as permitted under the Investment Company Act of 1940,
as amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time;
o issue senior securities, except as permitted under the Investment Company
Act of 1940, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
o concentrate its investments in a particular industry, as that term is used
in the Investment Company Act of 1940, as amended, and as interpreted or
modified by regulatory authority having jurisdiction, from time to time;
<PAGE>
o engage in the business of underwriting securities issued by others, except
to the extent that the Fund may be deemed to be an underwriter in
connection with the disposition of portfolio securities;
o purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured by
real estate or interests therein, except that the Fund reserves freedom of
action to hold and to sell real estate acquired as a result of the Fund's
ownership of securities;
o purchase physical commodities or contracts relating to physical
commodities;
o make loans to other persons, except (i) loans of portfolio securities, and
(ii) to the extent that entry into repurchase agreements and the purchase
of debt instruments or interests in indebtedness in accordance with the
Fund's investment objective and policies may be deemed to be loans.
The Fund's non-fundamental borrowing and lending policies have been amended by
the Board of Directors as follows:
o The Fund does not currently intend to borrow money in an amount greater
than 5% of its total assets, except (i) for temporary or emergency purposes
and (ii) by engaging in reverse repurchase agreements, dollar rolls, or
other investments or transactions described in the Fund's registration
statement which may be deemed to be borrowings.
o The Fund currently does not intend to lend portfolio securities in an
amount greater than 5% of its total assets.
December 31, 1997
