Osieck watched his side battle back from two goals down in a hot and humid Hwaseong Sports Complex on Thursday evening, only to concede an immediate third courtesy of a fine finish from the impressive Yuya Osako.
While not pleased with his side's first-half display, Osieck also believes that there are positives to take from the encounter ahead of coming tests.
"We are not happy with the score of the game this evening and I was not happy with our first-half performance," he conceded post-match.
"It took us way too long to play the ball forward and get into dangerous areas. However, in the second half, after the substitutions, we played the ball forward and created a lot of problems for the Japanese defence.
"It was good to score two goals in quick succession and I had the impression that Japan were really on the back foot. At that moment, we lost balance in defence and lost the header in midfield, but still the team responded and tried hard to score an equaliser.
"Down the road, when I consider the purpose of our participation at the competition, I will take a lot of positives from the game."
Osieck also had positive words for some of the less experienced members of his squad, with several younger players making a big impact in the second half.
Forwards Mitchell Duke and Tomi Juric both managed to get themselves on the scoresheet in just their second games for Australia, while substitute Mitch Nichols also provided an assist for his side.
"The substitutions changed our game, they made an immediate impact," Osieck continued.
"Mitch helped create a lot of opportunities in the attacking third; Mitchell Duke had an outstanding game, while Tomi Juric showed that he has an excellent striking technique."
Having watched the younger players seize their opportunities, Osieck plans to rotate the squad further in Sunday's encounter with China.
"The idea is that I will give all players a chance," he said.
"It's clear that I will change the team for Sunday."
Japan manager Alberto Zaccheroni, meanwhile, was far more content with his side's showing, blaming fatigue for the Samurai Blue allowing Australia to come back into the game in the late stages.
The Italian changed his entire 11 following their opening victory over China, with his players having come into the tournament off the back of a gruelling run of games in the J.League.
However, in doing so, he saw some fringe players make strong cases for inclusion in Sunday's decisive fixture with South Korea.
"The main purpose for the match was to give many players a chance and to experiment," he said.
"That is why we varied the line-up and, because of tiredness, we had to change some players during the game.
"The Japanese side overwhelmed Australia, with a great degree of flexibility throughout the side. It's good that we scored three times, but we conceded twice late in the game as it became harder to control the game as the side tired."
Japan now lead the standings in the competition, having claimed four points from their two games thus far.
South Korea and China find themselves tied on two points apiece, while Australia are the only side now unable to win the tournament on one point.
