In the prestigious season-ending tournament finale, Sindhu played her hearts out before going down fighting 21-15 12-21 19-21 to Yamaguchi in an energy-sapping summit clash that lasted an hour and 31 minutes.
It was Sindhu's third loss in a major final, following her narrow defeats at the Rio Olympics and Glasgow World Championship.
Coming into the match with a 5-2 head-to-head record, Sindhu, who had defeated Yamaguchi on Friday in the last group match, failed to outlast the diminutive Japanese, who showed better precision and athleticism to clinch the title.
Sindhu had won two super series titles at India Open and Korea Open, besides reaching the finals at Hong Kong Open and World Championship this year.