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PV Sindhu lost a hard-fought opening match to Akane Yamaguchi 23-21, 18-21, 11-21 in over an hour and 12 minutes.
Sindhu won the opening set but went on to concede the second.
India now trails 0-1 in the team quarterfinal.
Unnati Hooda will take on Tomoka Miyazaki in the next match.
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