JAVA Object/String method overload

Just out of curiosity I tried this example.

public class Class1 {

    public void method(Object obj){
        System.out.println("Object");
    }

    public void method(String str){
        System.out.println("String");
    }

    public static void main(String... arg){
        new Class1().method(null);
    }

}

The output being "String". I want to know on what basis the JVM decides to invoke method taking String as argument and not Object.