The Young Matildas have lost 1-0 against Japan in their opening match of the AFC U-19 Women's Championship in Chongqing, China.
Japan scored the only goal of the game in the 21st minute when Chinatsu Kira netted from close range past captain and Matildas World Cup squad member Lydia Williams.
Australia need at least a draw from tomorrow's match against reigning world champions DPR Korea to keep alive their hopes of qualifying for the 2008 FIFA U-20 Women's World Cup.
The top three teams at the eight-nation tournament will qualify for next years' World Cup in Chile.
In the other group match DPR Korea defeated Myanmar 3-0.
In the opening five minutes, Young Matildas keeper Lydia Williams had to make two good stops to deny Japan, while overall the Japanese controlled possession and had more shots at goal than Australia.
Japan started the second half, much like the first half and Williams again was in the thick of the action, making a sensational save in the 52nd minute to prevent Japan doubling their lead.
It was only in the latter stages of the second half that Australia was able to put any significant pressure on the Japanese goal with Elise Kellond-Knight having two attempts on goal, while Caitlin Cooper's header with 15 minutes proved the best opportunity for the Young Matildas.
"Japan were technically better than us and more consistent throughout the game, even though we had the better of them physically," said Young Matildas coach Alen Stajcic.
"We dominated the last 20 minutes going for the equaliser and we created a few good chances but unfortunately we just couldn't get the last touch.
"However we will regroup over the next day and prepare for the next game against DPR Korea which we must win."