Nano-JASMINE (NJ) is a very small astrometry satellite project led by the National Astronomical Observatory of Japan. The satellite is ready for launch, and the launch is currently scheduled for late 2013 or early 2014. The satellite is equipped with a fully depleted CCD and is expected to perform astrometry observations for stars brighter than 9 mag in the zw-band (0.6 μm-1.0 μm). Distances of stars located within 100 pc of the Sun can be determined by using annual parallax measurements. The targeted accuracy for the position determination of stars brighter than 7.5 mag is 3 mas, which is equivalent to measuring the positions of stars with an accuracy of less than one five-hundredth of the CCD pixel size. The position measurements of stars are performed by centroiding the stellar images taken by the CCD that operates in the time and delay integration mode. The degradation of charge transfer performance due to cosmic radiation damage in orbit is proved experimentally. A method is then required to compensate for the effects of performance degradation. One of the most effective ways of achieving this is to simulate observed stellar outputs, including the effect of CCD degradation, and then formulate our centroiding algorithm and evaluate the accuracies of the measurements. We report here the planned procedure to simulate the outputs of the NJ observations. We also developed a CCD performance-measuring system and present preliminary results obtained using the system. © 2012 SPIE.