Malvika, ranked 43rd, found the going tough against the world No.5 losing 10-21, 16-21 in just 35 minutes as India's challenge in the Super 1000 tournament came to an end.
The loss comes just a day after the 22-year-old Malvika had defeated two-time Commonwealth Games medallist and world No. 25 from Scotland Kristy Gilmour in a round-of-16 clash.
This was the third successive loss for Malvika against Yamaguchi, the former world No. 1.
The Nagpur shuttler was no match for Yamaguchi in the opening game as the Japanese took a massive eight-point lead at 12-4 before closing out the game at 21-10.
The second game was a more even affair with the Indian going neck-and-neck till 15-all before Yamaguchi showed her class to leave Malvika stranded.