With Japan losing both of their previous games at the tournament, the Matildas had it all to play for after beating Brazil and drawing with America.
A tight first 45 minutes saw Japan look most threatening with Australia struggling for fluency as coach Alen Stajcic withdrew both Claire Polkinghorne and Lisa De Vanna after just half an hour.
Despite a few dangerous counter attacks from both sides, it would remain scoreless heading into the break.
The Matildas emerged from the interval looking a lot sharper and would hit the lead in the 47th minute when Alanna Kennedy fired a free-kick through an ineffective Japanese wall.
— Westfield Matildas (@TheMatildas) August 2, 2018
Sam Kerr would twice go close to doubling Australia's lead in the aftermath with only the post and Japan's keeper Chika Hirao denying the Matildas a vital second.
Level on points and goal difference with the US heading into game, Australia were eager to put the pressure on America ahead of their clash with Brazil that would decide who claimed the Tournament of Nations.
Searching for a second, the Matildas were also being tested at the back with Japan desperate to avoid three straight defeats.
Kerr would eventually sink the Japanese however, as she somehow escaped with the ball after a challenge from two Japanese defenders, ran around Hirao at the edge of the box and slotted the ball into an empty.
The 2-0 win put all the pressure on the US, who after falling behind early ultimately saw off Brazil 4-1 to take a second Tournament of Nations title away from Australia on goal difference.