Renee Taylor had put Australia ahead in the third minute in stand-in captain Jane Claxton’s 150th game but Japan responded before quarter-time through Miyu Suzuki.

Mai Toriyama deflected home from Naho Ichitani’s pass for what proved to be the match winner despite a frenetic finish from the visitors.

The result ends Australia's campaign on a disappointing note after winning all three round robin matches.

Australia are next in action in the Champions Trophy in China in November.

"I thought we got into it towards the end of the first half. It shows how important penalty corners are,” Hockeyroos coach Paul Gaudoin said. 

Earlier, Taylor opened the scoring in the third minute with a diving deflection from Claxton’s incisive pass.

Japan responded from a penalty corner when Naho Ichitani’s slider was deflected past goalkeeper Jocelyn Bartram by a desperate Toriyama.

The hosts took the lead when Naho Ichitani dispossessed Georgina Morgan, jinked inside the shooting circle and chipped for Toriyama to convert at the far post.

Australia almost levelled right on half-time when Taylor creatively deflected Edwina Bone’s drive into the D.

Morgan also came close in the 30th minute with a drag flick which went marginally wide.

After a series of half-chances for the Hockeyroos, Japan almost got a third when a diving Akiho Imao was denied by Bartram in the third quarter.

Chasing an equaliser in the last 15, Bone again caused chaos inside the D with a driven cross, but Japan goalkeeper Akio Tanaka pushed it away, before Grace Stewart flashed a 58th minute shot wide in the final real chance.