The Eugenic Protection Law, which was in effect for nearly half a century until 1996, authorized the government to conduct forced sterilization and carry out abortions to prevent the birth of "inferior" descendants.
Around 25,000 people with physical and mental disabilities or illnesses such as leprosy were said to have been sterilized under the government campaign that ran from 1948 to 1996. Around 16,500 were sterilized without their consent.
In April, the Japanese Parliament passed a law to compensate victims of the forced sterilization programme with 3.2 million yen compensation ($28,614) to each of the victims.
The court ruling the Sendai District Court on Tuesday was one of the first awaited in a series of compensation claims by the victims across the country who have sued the government for human rights violations, Efe news reported.
However, the court denied compensation to two women claimants one 60 and the other 70 who had demanded 71.5 million yen ($653,000) from the government, national broadcaster NHK said.
One of these two women told the Guardian earlier that she had been forcibly sterilized in her mid-teens because she was suspected of having an intellectual disability.
The court said the deadline for demanding compensation was already over.
According to the ruling, as reported by Japan's official news agency Kyodo, the state argued that it cannot compensate the claimants because they could have claimed the damages earlier, under the state compensation law, but did not do so.
The state argued that the statute of limitations in the claims of damages under the civil code was 20 years and the two women were operated more than four decades ago.
Germany and Sweden had similar measures, but have since apologized to victims and provided compensation.
( With inputs from IANS )