They had lost their opener against South Korea's Kim So Yeong and Kong Hee Yong.
Ponnappa and Crasto, world number 19, are currently placed third in their group behind the Japanese and the South Koreans.
The two top ranked pairs from each group qualify for the quarterfinals.
"A bit disappointed because this was the only shot we had for a chance to get to the quarters. Not the way we wanted to play but they were very strong. I wish we had given them a better fight. We have one more match and hope we can win that," Ponnappa said after the game.
"They were very strong, offensively and defensively. Defensively we were a bit lacking today which cost us quite a few points. Offensively, when we were attacking, we could have capitalised a bit more," she added.
The Indians were not able to apply any pressure on their opponents as they never managed to take lead or even draw parity.
The Japanese duo, on the other hand, took control of the match from the onset, racing to a 4-0 lead after Crasto netted a long rally.
The seasoned Ponnappa produced a smash to earn India's first point and Crasto followed suit with a body smash to make it 2-7.
But it was mostly a one-way traffic from there as the Japanese kept inflating their lead to take the game.
The Indians were put under pressure from the start in the second game as the Japanese raced to a 7-1 lead.
To make matters worse for the Indians, Crasto injured her finger and required medical attention.
Crasto and Ponnappa then fetched three back-to-back points but the Japanese squashed the Indians' momentum.
Matsuyama and Shida's quick court coverage, coordination, and effective combination of power and placement proved too much for the Indian pair and in the end the Japanese had nine match points.
Ponnappa and Crasto will take on Australia's Setyana Mapasa and Angela Yu in their final group game.
"There's a lot to take away. It build my confidence as we are playing at such a high level and giving fight to each an every pair. It takes a lot of courage and confidence to play here in front of so many people. It's not over for us yet, hopefully we will be able to pull through," Crasto said.�