Japan's net assets held by individuals, companies and the government at home and abroad shrank 3.4 percent from a year earlier to 2,799.5 trillion yen (26 trillion dollars), the Cabinet Office said in a report.

The net assets, which exclude debts, hit a record high of 3,552.2 trillion yen at the end of 1990, but has since gradually declined as the burst of the economic bubble depressed real estate and stock prices and deflation made the situation worse.

Total land assets fell 5.5 percent from a year earlier to 1,369.4 trillion yen at the end of 2002, the 12th straight annual fall.

The report also said the nominal value of Japan's gross domestic product (GDP) in dollar terms dropped 4.3 percent to 3.98 trillion dollars in 2002, but remained the second largest in the world.

The US economy topped the global list with 10.45 trillion dollars in total output last year, up 3.6 percent from 2001, while third place went to Germany, which produced 1.99 trillion dollars, up 7.1 percent.

Japan's per-capita nominal GDP fell 4.5 percent to 31,277 dollars, the sixth largest in the world and down from fifth place the previous year.

Luxembourg remained at the top of the per-capita GDP list with 46,722 dollars, followed by Norway, Switzerland, the United States and Denmark.