Japan substitute Kumi Yokoyama crashed home an impressive winner against the run of play with six minutes remaining after the Matildas had dominated large chunks of the match against the 2011 World Cup winners.

It was a much-improved performance from Australia after some indifferent performances at the eight-nation tournament after needing penalties to see off unfancied Thailand in the semi-final.

The Matildas were assertive from the outset and constantly looked a threat while dominating large periods of play.

But a failure to convert in front of goal proved their downfall. Elise Kellond-Knight had her first-half penalty saved.

Sam Kerr had a first-half strike smartly saved by impressive Japan goalkeeper Ayaka Yamashita, while Emily van Egmond crashed an effort against the crossbar in the second half.

"We put them under a lot of pressure in the final third, creating a lot of chances, and they took their chances, and that is what we need to do," said Australia defender Clare Polkinghorne.

"In the opening period we put them under a lot of pressure and won that penalty, which if we had scored might have changed things.

"The positive is that we are creating chances and on another day it would be enough."

The defeat meant Australia missed a rare opportunity to be champions of Asia in male and female football after the Socceroos' 2015 triumph.

The Matildas were the first Australian team to win the Asian title in 2010.

The result continues a poor run against Japan for the Matildas, who lost by the same 1-0 scoreline in consecutive Asian Cup finals, as well as at the 2015 World Cup.

Australia were outplayed in that defeat, but the Matildas turned the tables on Japan this time in all areas except where it mattered most.

Disappointed Australia coach Alen Stajcic took positives from his side's performance ahead of next year's World Cup in France.

"I thought that was our best performance of the tournament and the best we have played for a while," he said.

"We dominated all over the field and created a number of chances, but just couldn't execute in front of goal.

"For us there are a lot of positives and there are a lot of good things to take away."

Australian Associated Press