The green and gold were held goalless for the third time in five matches at the tournament with their hosts bagging a fortunate winner in the second-half.
While the Socceroos again edged possession and chances created, they failed to make the most of them as Arnold's attacking ambitions failed to bear fruit.
Still just eight games into his second stint in charge of the national team, Arnold has stressed more time is needed for this Australian side to adapt to his intended style of play.
"The style that we expect to play takes time,” Arnold said.
"You’ve got to remember I’ve been in charge only for four months, I’ve only had eight games with these boys. The style is completely different to what they’ve ever played.
"I’ll be honest, I think that we’ve done very, very well this tournament. With the amount of players that haven’t been capped, the whole frontline for the first three games had less than 10 games between all three of them.
"The inexperience - a couple of players from the A-League that have stepped up in Rhyan Grant, Chris Ikonomidis - who hadn’t played before.
"I’m very, very proud of this group of players. They gave their all and that’s all I can ask."
Arnold's attention now turns to the Olyroos with the Socceroos coach eager to ensure Australia's young players are given the best chance of making it to the senior side.
"Most important thing now for me is to go home, to get this Olympic team ready," he said.
"Getting those young players pushing through into the senior national team.
"Our goal is one day to be like Japan, where you can have 25-26 players at the same level and you can change players for every game."