It was the reversal of fortunes exactly after a year.
Chen, the world junior champion, had ousted the top seed, Akane Yumaguchi, and the 2013 champion, Ratchanok Intanon, on her way to the last four.
And it worked. Nozomi exhausted out Sindhu by prolonging the rallies as the Hyderabadi tried to close the points quickly and made errors.
Congress Vice President Rahul Gandhi also tweeted to congratulate Sindhu for her wonderful match performance.
The Indian shuttler received a bye in the first round and had an easy outing in the second against Kim Hyo Min, who lost in straight games.
The Rio Olympics siler medallist, assured herself of at least a bronze with a clinical display against World No. 6 Chinese Sun Yu.
She settled for silver this time.
The Indian was sacked up now.
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The second game was possibly the best of the three as the two finalists were engaged in long rallies, including one that lasted 73 shots.
Sindhu dished out an aggressive game and never looked in doubt as she led from start to finish during the 39-minute lop-sided match against Sun, who was out of sorts and nervous. But Sindhu pushed the limit and got a yellow card as warning from the umpire.
The match got only more brutal and demanding in the third and deciding game, in which the chair umpire often instructed the players to stay on court as they tried to take repeated breathers via towel breaks, tying their laces or sipping water. So close was the contest that of the 124 points played, Sindhu won 61 while Nozomi took 63.
Over the space of two days, Okuhara has dealt the two biggest names in Indian badminton two bruising defeats.
Saina produced a down-the-line smash to level par, while Okuhara unleashed an onrushing backhand flick to lead 18-17 and then an overhead return took her to 19-17.
PV Sindhu has become a force in world badminton.
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