The Blue Samurais top Group D, as Japan booted Jordan from the tournament with a 2-0 victory.
Japan had the ball in the net after 10 minutes, but Takashi Inui's effort was disallowed after the officials decided the ball was out of play when Shinji Kagawa delivered the cross.
Japan continued to dominate and found the back of the net again in the 24th minute.
This time, it counted.
Keisuke Honda finished with a simple tap-in after goalkeeper Amer Shafi parried Shinji Okazaki's shot into his path.
That was Honda's third of the tournament, and his first from open play.
Japan led 1-0 at the interval.
It was effectively over, on 82 minutes.
Shinji Kagawa completed a well-worked team move as he got his first goal of the tournament.
The win meant Japan top Group D with nine points and will face the United Arab Emirates in the quarter-finals in Sydney on 23 January.
And Iraq became runners up after shutting out Palestine 2-0. Iraq needed to win to seal their quarter-final place, while Palestine had only pride to play for, having already been eliminated.
With the win, Iraq will go on to face neighbors and tournament heavies Iran in quarter-finals action on Friday.
