Japan's Nikkei Index Falls 0.74 Percent

The Nikkei 225 average fell 112.05 points, or 0.74 percent, to close at 15,042.56 points on the Tokyo Stock Exchange. It was the Nikkei's lowest close since July 2006.

Trading volumes may become increasingly thin this week, leaving the market vulnerable to speculators looking for quick profits ahead of the U.S. Thanksgiving holidays and a Japanese holiday Friday, traders said.

There are many uncertain factors to overcome before investors see the low valuation of Tokyo shares as a bargain hunting opportunity, said Teruhisa Ishikawa, investment information manager with Mizuho Investors Securities.

"The holiday shopping season is just starting this week, while the subprime loan issue is still very hard to fully digest at this point in time," he said.

As more people buy gifts via the Internet these days, the first reliable U.S. consumption data for this year's holiday season are unlikely to arrive until at least the middle of next week, Ishikawa said.

Among steelmakers, Nippon Steel lost 4.6 percent to 629 yen, and JFE Holdings shed 4.4 percent to 5,490 yen.

In trading house shares, Mitsui & Co. sagged 6.5 percent to 2,305 yen, while Marubeni declined 6.1 percent to 766 yen.

Machinery makers also lost ground, with Komatsu falling 6.3 percent to 3,120 yen.

The Topix index of all Tokyo Stock Exchange First Section issues lost 1.02 percent to finish at 1,456.61.

In currency trading, the dollar was trading at 110.55 yen at 2:50 p.m.(0550 GMT) Monday, down from 110.82 yen late Friday in New York. The euro rose to US$1.4666 from US$1.4659.