The Osaka High Court on Wednesday dismissed an appeal filed by Defense Minister Tomomi Inada in a defamation lawsuit against a magazine.
Inada had sought compensation for an article that linked her to an anti-Korean group known for hate speech. The case dates from before she was appointed defense minister.
Inada demanded a printed apology and ¥5.5 million in damages from The Mainichi Newspapers Co., which owns the publisher of the magazine.
The appeals court upheld the lower court decision that dismissed her demand.
In 2014, the Sunday Mainichi weekly magazine reported that Inada's funds management organization had received about ¥210,000 in donations from eight people associated with a senior member of Zaitokukai, saying their "close proximity stands out."
The headline of the article read: "Abe's and sympathizer lawmaker's honeymoon with extreme-right Zaitokukai."
Inada said the article was damaging as it gave the impression that she supports Zaitokukai, but the Osaka District Court ruled in March that the text did not deviate from the boundary of fair comment. The high court made a similar statement in Wednesday's ruling.
Mainichi Newspapers said the high court ruling was appropriate in the case.
Inada released a statement saying she has not studied the decision yet but plans to appeal to the Supreme Court.
Zaitokukai, known for its rallies and hate-speech slogans, calls for the abolition of the right of Korean residents to live permanently in Japan.