The World No.12 shuttler had a poor outing against Japanese qualifier Akane Yamaguchi as she was beaten in straight games in 32 minutes at the Tokyo Metropolitan Gymnasium. The World No.145 beat Sindhu 21-6, 21-17 to move into the women's singles quarterfinals.
Her compatriots H.S. Prannoy, K. Srikanth and Ajay Jayaram though advanced to the quarterfinals of the $200,000 Japan Open Super Series on Thursday.
Jayaram had a tough second round men's singles outing against local qualifier Yuichi Ikeda but eventually won in three games in a 55-minute battle. The Mumbai lad won 21-13, 11-21, 21-18 in his first ever match against Ikeda.
Thailand Open Grand Prix Gold champion K. Srikanth also entered the last eight easily overcoming another local qualifier Kazuteru Kozai 21-12, 21-16 in 32 minutes in their first ever encounter and will take on Japanese seventh seed and World No.5 Kenichi Tago next in their first ever meet.
Youth Olympics silver medallist Prannoy caused an upset by beating World No.6 Danish shuttler Jan O Jorgensen in three tough games. The Kerala shuttler came out victorious 21-14, 13-21, 21-17 in 53 minutes to enter the last eight.
However, Mumbai's Anand Pawar wasn't so lucky as he went down to World No.1 Lee Chong Wei of Malaysia in 35 minutes. The top seed won 21-12, 21-16.
The Indian men's doubles action also came to an end with the defeat of Manu Attri and B. Sumeeth Reddy, who lost to Xiaolong Liu and Zihan Qiu of China. The fourth-seeded Chinese pair won 21-17, 21-16 in 36 minutes in the second round.
Olympic bronze medallist Saina Nehwal remained at number four but Sindhu lost two places to be placed outside the top 10 list in the latest BWF world ranking.
The 18-year-old from Hyderabad had won the bronze medal at the World Championship to reach the number 10 spot last month, but now she has slipped to the 12th place with 51472 points.
Men's singles players Parupalli Kashyap and RMV Gurusaidutt also lost one and three places, respectively to slump to 14th and 23rd spot.
Among others, Ajay Jayaram lost seven places to be placed at 30th, while Anand Pawar, B Sai Praneeth and K Srikanth were steady at 37, 38 and 39th spots, respectively.
Sourabh Verma lost 10 places to slip to 46th position.
There are no Indians in the top-25 list in the men's, women's and mixed doubles rankings. Indian shuttlers had skipped Chinese Taipei Open and the China Masters after the Indian Badminton League (IBL).