Socceroos coach Graham Arnold has defended his choices during his team's key World Cup loss to Japan — a defeat that forces Australia to go through the intercontinental play-off in order to qualify for Qatar.

Following a difficult week where Arnold tested positive to COVID-19 and was then forced to apologise after breaching isolation rules and being fined $25,000, the Socceroos were beaten 2-0 at Sydney's Olympic stadium.

Australia had a first-half goal ruled out for a foul by Trent Sainsbury on Japan's goalkeeper.

The team had gone into the game knowing only a win would keep alive its hopes of automatically qualifying for the finals in Qatar in November.

But the visiting team had the better of the play. Australia failed to take its chances and eventually Japanese substitute Kaoru Mitoma finished off the game with two goals in the final six minutes.

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"[It's] obviously disappointing, but at the 87th minute 0-0 still isn't good enough to qualify, so we opened ourselves up and we went four up front, and we gave them too much space," Arnold told Channel 10 after the game.

"And at the end of the day, they're a quality team and they were probably the better team on the night.

"I think it's been a tough two years, to be honest, with [COVID and] international football and travel, and what these boys have been through and the staff have been through.

"So at the end of the day, we've got the third-placed spot, and you've got to be positive about that. We did that in 2018 [and qualified for the World Cup] and we've just got to move forward."

Despite the need for a win, Arnold left striker Jamie Maclaren on the bench until the 84th minute, while Mitchell Duke, who had not scored in nine games at club level of Fagiano Okayama in the Japanese second division, was left on.

When Arnold did make a change it was to bring on Uruguayan-born Perth City striker Bruno Fornaroli in the 67th minute. 

"Jamie's always been a player who can score a goal at any time in the game," Arnold said.

"And when he ran out of legs we needed someone who can use their body well like Bruno [Fornaroli] and I thought Bruno did well when he came on."

The loss means Australia finishes third in its qualifying group regardless of the result against Saudi Arabia next week.

It will have to play the third-place team in Group A — most likely either United Arab Emirates or Iraq — and then if it wins, it will have a play-off against the fifth-placed team in South America, which at this stage will be Peru.

"Look, I think it's a game [against Saudi Arabia] to give the kids a chance again, and we've given a lot of kids a chance tonight in a big game. They're going to learn a lot from the experience," Arnold said.

"You look at their (Japan's) players. They're top-quality players and Japan are obviously a top side. Full credit to them. But we've got to brush the dust off and get ourselves ready.

ABC/AAP