Malaysia will face Indonesia in the Thomas Cup quarter-finals after losing 1-4 to Japan to finish as Group D runners-up.
The winning team of the Southeast Asian tie would go on to face Denmark or India in the semi-finals.
Earlier in the group stage, the Japanese, who were drawn with South Korea, displayed their superior quality against a young Malaysian side once again skippered by Lee Zii Jia.
Lee vs Kento Momota was first up, and it was a titanic 80-minute battle that swung in the world number one's favour by the slimmest of margins 15-21, 21-12, 23-21.
Lee came into this contest having beat Momota in straight games in their last Sudirman Cup encounter, and he continued in the same confident fashion by dictating the opening game to win 21-15.
Momota was a different player in the second game, as he upped the tempo to leave Lee reeling on many occasions and bagged a 21-12 win.
The third game had everything one could have asked for, with both shuttlers trading points until Lee pulled away to hold match point at 20-18.
But Momota persevered, clawed back two points to force deuce and eventually crossed the line to win 23-21.
Lee admitted afterwards he was crestfallen to have lost to Momota with match points in hand.
Men’s doubles pair Aaron Chia-Soh Wooi Yik was expected to give Takuro Hoki-Yugo Kobayashi a stern test, but the Malaysians’ performance was littered with many unforced efforts as they surrendered tamely 13-21, 13-21.
“We did not play at the level we expected from ourselves. We need to figure a way to make a breakthrough against them after this,” said Chia after the pair suffered a second consecutive straight-game loss to their opponents.
Kanta Tsuneyama sealed Japan’s win and confirmed them as group champions with a 22-20, 21-13 over Cheam June Wei.
Cheam had done well to claw his way back from a 7-15 deficit in the first game to hold match point at 20-19.
But he faltered and allowed Tsuneyama to lead, and the Malaysian was out of sorts in the second game to lose tamely.
Akira Koga-Yuta Watanabe continued to pile misery on the national team with a 21-10, 21-16 victory over Goh Sze Fei-Nur Izzuddin in the second men’s doubles.
But Leong Jun Hao proved the saving grace for the national team with delivering the only point against Kenta Nishimoto courtesy of a 21-19, 21-18 in the final match.