Japan head coach Takeshi Okada and player Yuji Nakazawa console each other after their tough loss to Paraguay in Pretoria. ((Luca Bruno/Associated Press))

Japan coach Takeshi Okada feels his work is done despite the team falling short of his lofty goal of reaching the World Cup semifinals.

Japan was beaten in a penalty shootout by Paraguay on Tuesday after their round of 16 match ended 0-0 following extra time.

"I don't think I have anything left to do now," Okada said.

This was the first time Japan had reached the knockout stage of a World Cup on foreign soil. Japan also reached the second round when  it co-hosted the 2002 tournament.

Okada said before the tournament he was targeting a semifinal berth, a bold declaration considering Japan's mediocre lead-up form.

However, Japan made it past the group stage with wins over Cameroon and Denmark and a narrow loss to the Netherlands.

On Tuesday, the team could find no way past Paraguay's defence, which has only conceded one goal in four matches. Daisuke Matsui's 25-yard shot that rebounded off the crossbar in the 22nd minute was as close as Japan came.

"When I look back at what I could have done for the players, as the head coach I should have been more insistent on winning."

Japan's defeat ended Asia's challenge at the World Cup. South Korea also lost in the round of 16, to Uruguay, while Australia and North Korea exited at the group stage.

"In terms of how we played, I have no regrets," Okada said. "No regrets at all. The players have been truly proud at being Japanese and representing Asia as a whole."

Japan always had Japanese managers until 1992, when Hans Ooft of the Netherlands took the job, followed by Brazil's Falcao.

Okada was appointed in 1997-98 before a reversion to foreign managers: Philippe Troussier of France, Zico of Brazil and Ivica Osim of Bosnia. Okada then resumed the role in 2007.

Goalkeeper Eiji Kawashima, who was unable to get a glove on any of Paraguay's penalties, wants another Japanese coach.

"With a Japanese coach, we can communicate directly," Kawashima said. "It is an advantage for the Japanese team."