The world number 92 lost 6-4 6-4 against seventh seed Monica Puig, with the Puerto Rican world number 48 consistently attacking Watson's serve.
Watson defended doggedly and saved nine of the 14 break points she faced, but she was unable to make much headway on Puig's serve.
The British number two earned three breaks of serve against an opponent a year younger than her, but struggled to create openings and went down in straight sets.
British number one Laura Robson is also playing at the event, and begins on Tuesday against 42-year-old Japanese legend Kimiko Date-Krumm.
Latest results from WTA events
Results from the Japan Open Women's Singles Round One matches
3-Samantha Stosur (Australia) beat Johanna Larsson (Sweden) 6-4 6-2
5-Eugenie Bouchard (Canada) beat Varvara Lepchenko (U.S.) 6-3 6-0
8-Monica Puig (Puerto Rico) beat Heather Watson (Britain) 6-4 6-4
Misaki Doi (Japan) beat Silvia Soler Espinosa (Spain) 6-1 6-2
Kurumi Nara (Japan) beat Caroline Garcia (France) 6-3 6-2
Linz Open Women's Singles Round One matches on Monday
Stefanie Voegele (Switzerland) beat Klara Zakopalova (Czech Republic) 5-7 7-5 6-0
Francesca Schiavone (Italy) beat Karolina Pliskova (Czech Republic) 7-5 6-2
Elina Svitolina (Ukraine) beat Mona Barthel (Germany) 6-2 7-5