LOS ANGELES : Paraguay sensationally sent four-time champions Germany crashing out of the World Cup on Monday as Brazil were given a huge scare before snatching a last-gasp victory over Japan to reach the last 16.

Germany's hopes of mounting a deep run at the tournament ended at Foxborough's Gillette Stadium with the country's first ever defeat in a World Cup penalty shoot-out.

Paraguay goalkeeper Orlando Gill was the hero for the South Americans, saving from Kai Havertz and Nick Woltemade to give them the advantage.

But Paraguay blew two chances to win it before Jose Canale blasted in the winning spot-kick after Jonathan Tah blazed his effort over the bar.

Germany had never lost a penalty shoot-out at a World Cup on four previous occasions since the 1982 finals in Spain.

"Obviously, we analysed every player and every detail of the penalty-takers," Paraguay keeper Gill said afterwards. "Thank God I was able to save two penalties. This is a privilege; we eliminated a champion."

Germany coach Julian Nagelsmann, who sat stunned on the bench after the defeat, said simply: "We didn't do enough today."

The match had gone to penalties after the two sides finished locked at 1-1 after extra-time. Germany's Tah had seen a headed goal controversially disallowed after a VAR review in extra-time.

Earlier, Julio Enciso had given Paraguay a 42nd minute lead before Arsenal forward Havertz equalised for Germany nine minutes into the second half.

Paraguay will now face either France or Sweden in the last 16, who play on Tuesday.

- Brazil escape -

Another shock had looked on the cards earlier Monday when Brazil squeezed past Japan 2-1 in Houston to book their place in the last 16 thanks to a 95th-minute winner from Gabriel Martinelli.

Japan had threatened to pull off one of the all-time great World Cup upsets after Kaishu Sano fired them into the lead with a superb 29th-minute goal on the counter-attack.

Brazil looked stunned by the Japanese opener for the remainder of the half and the Asian giants comfortably protected their lead up to half-time.

But Brazil coach Carlo Ancelotti introduced striker Endrick at half-time and the South Americans immediately looked more threatening.

They equalised on 56 minutes, Casemiro nodding in at the far post after a superb curling cross from the left by Gabriel Magalhaes.

Japan though appeared to have done enough to force extra time, but paid the price after Ao Tanaka coughed up possession on the edge of the area in injury time. The ball found Martinelli, who took a touch before burying the winner.

"I can't find the words to describe the joy in my heart. Seeing all those fans on their feet, my parents, my friends... I can't explain it," said Martinelli.

Japan coach Hajime Moriyasu said his team would depart the tournament with heads held high.

"Even people who don't really know or pay much attention to football have come to see that Japan is fighting to become world champion and is growing and challenging itself," Moriyasu said.

Brazil will face either Ivory Coast or Norway in the last 16.

In Monday's other last 32-clash, the Netherlands take on 2022 World Cup semi-finalists Morocco in Monterrey, Mexico.

The Netherlands are World Cup royalty but have never been crowned, finishing as runners-up in 1974, 1978 and 2010.

Often cited as the best nation never to have won the tournament, they are unbeaten in 15 World Cup matches since losing the final in 2010, if penalty shootouts are excluded.

The Dutch did not qualify for the 2018 World Cup in Russia.

Awaiting the winners will be co-hosts Canada, who became the first team to reach the last 16 on Sunday with a 1-0 defeat of South Africa in Los Angeles.