Some heroic shot stopping by goalkeeper Lydia Williams wasn't enough to save the Matildas from a 1-0 loss to Japan in the third match of their Olympic qualification campaign, leaving their participation at the London Games in doubt.

The Matildas held Japan to a scoreless first half at Shandong Sports Centre with Williams effectively keeping her side in the contest.

But a succession of strong build-up plays saw Japan's Nahomi Kawasumi score the match-determining goal in the 62nd minute.

With three matches played and just the one win, the Australians face an uphill battle to get to London with a top two finish required in the six-team group to qualify for the Games.

The Matildas had lost their opening match to North Korea 1-0 and defeated Thailand 5-1.

Coach Tom Sermanni said the score didn't reflect Japan's dominance.

"In reality, we were completely outplayed by the Japanese," he said.

"Japan are playing with a huge amount of confidence and belief at the moment.

"We knew the games in this tournament were going to be very tight, with a question mark about where we would be at having to back up after the women's World Cup.

"We felt that we were well prepared and well rested going into the game, which we thought might have given us an edge. But that turned out to be incorrect.

"The key thing now that is a test of our abilities and of our character is that we still have two games left in this competition.

"There is still the possibility of qualifying for the Olympics. While that's still alive, we need to go out and perform.

The Matildas will play China on Thursday and South Korea on Sunday.

AAP