A first-half goal from Maika Hamano was all that separated the two sides in front of 74,397 at Stadium Australia as Japan claimed their third Asian crown.
After cantering through to the final, Japan were put under siege by the Matildas for large parts of Saturday's match, but the home side were unable to land a killer blow.
Montemurro's outfit were more than a match for the Japanese, but will be left kicking themselves about their inability to find the net when it mattered most.
Captain Sam Kerr and Mary Fowler were contained more and more as the match wore on, while Caitlin Foord butchered two golden opportunities in the first half.
Alanna Kennedy, who had the consolation of being named player of the tournament, then failed to convert the Australia's last big chance late in the second half.
"The final scenario didn't happen for us, we created enough but it didn't go in - that's football at this level," said Montemurro, who will lead Australia into a World Cup in Brazil in 15 months time. .
"We created more chances tonight than we probably did all tournament and didn't score.
"I'm proud to be the leader of this great football nation. I've got 26 warriors out there who have been fantastic for 21 days."
The Asian Cup final loss continues a run of near-misses for the Matildas this decade which includes semi-final finishes at the 2021 Tokyo Olympics and the 2023 World Cup.
"I said to the players, 'You should be so proud to represent this country, you should be so proud of what you've done'," Montemurro said.
"I told them, 'don't drop your heads'. They can't drop their heads. They've got to keep going forward now, because we're at a very good point."
Fowler created two brilliant chances inside the opening 10 minutes, the first after just 90 seconds that resulted in a scuffed Kerr shot being parried away by Ayaka Yamashita.
The goalkeeper was again called into action as Foord, off the back of another piece of smart play from Fowler, fired a big chance straight into the arms of the Japanese No.1.
And after surviving an early onslaught of Australian fight and fire, Japan slipped back into the groove that has made them the dominant force at this competition and found a goal in the 16th minute.
The Matildas had done well to contain Japan's attack, but a momentary switch-off from Kennedy and Kyra Cooney-Cross was all Hamano needed.
The forward unleashed from the edge of the box and her dipping shot sailed past Mackenzie Arnold and into the back of the net.
Australia kept the Japanese at bay for the remainder of the first half and should arguably have gone in at halftime level.
Foord couldn't get a shot on target when Yamashita made a blunder at the back, and the Arsenal striker then fluffed her best chance of the night on the stroke of halftime after a brilliant cross from Kerr.
"Australia is a difficult team to play," said Japan coach Nils Nielsen.
"The character of our players is that they never stop playing."
Montemurro resisted halftime changes as Japan pressed for a second through Riko Ueki, who finished with the tournament's golden boot with six goals
Hayley Raso was thrown into the mix by Montemurro, but Australia still struggled to draw level despite looking the more dangerous side.
Kennedy had the last chance, but could only guide her header into Yamashita's grasp as Japan claimed victory and the Matildas' 16-year wait for a major trophy rolled on.
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