Tokyo
The world number two was swiped aside 6-1 6-4 by Czech Marketa Vondrousova in an early shock on Day Four of the Games.
The tennis event has now lost both of its top draw cards after world number one and Wimbledon champion Ash Barty was beaten in Sunday's first round.
Osaka, who lit the Olympic cauldron on Friday to open the Games, seemed out of sorts on the Tokyo blue courts and never settled into a rhythm as Vondrousova never looked back.
The Japanese player sprayed a costly 18 unforced errors throughout the match -- three times the number made by Vondrousova.
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