Japan's Naomi Osaka dropped her first red group match at the WTA Finals on Monday, falling 7-5, 4-6, 6-1 to American Sloane Stephens in a battle between the last two U.S. Open champions.

Stephens, ranked sixth in the world, overcame an error-filled performance that included handing away a service break with five straight faults before clinching the first set. Osaka, ranked fourth in the world, cruised in the second set, which brought the crowd to its feet with a series of scintillating rallies at Singapore Indoor Stadium.

(Sloane Stephens)

Osaka, however, too often found nothing but net in the third set, dropping to her knees when she netted a return that handed Stephens a 3-1 lead. Two more unforced errors into the net by Osaka gave Stephens a triple break point in the next game and caused Osaka to swing her racket violently toward the court in frustration.

"I'm really happy to be through," Stephens said. "Naomi, she's a great player and playing with a lot of confidence right now. We played a good competitive match, and it's always an honor to play on the same court with somebody that good."

"I just competed really well. I never gave up. I knew I was going to have to play some really good tennis to beat her, so I just stayed tough and tried to stay as positive as I could and just my opportunities when they presented themselves."

Osaka, who has a Haitian father and a Japanese mother, is the first player representing Japan in the tournament since Ai Sugiyama played in 2003.

The finals' eight-woman singles tournament is divided into four-player groups. The other two players in the red group, top seed and world No. 2 Angelique Kerber and eighth seed Kiki Bertens, played in the late match.

The top two players from each round-robin group advance to the semifinals.