Australia's world No.3 posted a second-round one-over-par 73 to fall eight eight shots adrift of South Korean marvel Jiyai Shin and home hope Nasa Hataoka.

In stark contrast to her blazing eagle-birdie start in the first round, Lee wobbled early with three front-nine bogeys, then another on the 10th hole at the Seta Golf Club in Shiga on Friday.

The 2025 Women's PGA champion rallied with two birdies down the stretch to limit the damage and give herself a fighting chance over the weekend.

But after dropping to three under for the tournament, Lee will need to reel in Shin, Hataoka and 33 others above her on the leaderboard to lift the trophy on Sunday.

Lee's fellow Australians, Karis Davidson (69) and Robyn Choi (73), are two-under and level with the card respectively.

Shin surged to 11 under with a second-round 67, before Hataoka joined her with a birdie at the last for a 68.

Seeking an incredible 67th worldwide win, Shin collected six birdies, with her lone dropped shot coming at the par-3 12th. 

The 37-year-old former world No.1 and Hataoka are one stroke in front of British Open champ and last week's Maybank Championship winner Miyu Yamashita (69).   

A trio of fellow Japanese players - Shuri Sakuma (66), Sayaka Takahashi (67) and 2019 Japan Classic champion Ai Suzuki (67) - are all a further shot back in a tie for fourth at eight under.