Australia's world No.5 signed for an even-par 72 after dropping three shots in her last six holes in Thursday's opening round in Shiga.
Lee is languishing in a tie for 46th position, seven strokes behind Japanese co-leaders Ai Suzuki and Momoko Ueda, who both fired seven-under 65s.
Lee had led the player-of-the-year race since winning her second career major at the US Open in June before former world No.1 Lydia Ko edged ahead two weeks ago with victory at the Ladies BMW Championship in Korea.
Ko is just one point ahead of Lee with three tournaments remaining this season, with 30 points on offer to Sunday's winner and points awarded to all top-10 finishers.
The New Zealander is sitting out this week's event, but Lee needs at least a top-10 result to nudge back ahead of Ko.
The Perth ace was travelling nicely on Thursday, climbing to three under through 10 holes and sharing sixth spot mid-round.
But she tumbled down the leaderboard with bogeys at the 13th, 16th and 17th holes.
Lee has already wrapped up the Annika Major Award for 2022 after finishing joint second at the LPGA Championship and equal fourth at the Women's British Open in addition to her US Open triumph at Pine Needles.
But the 26-year-old's gruelling season appears to have taken a toll, with Lee missing three straight cuts in her past five events and sharing 49th and 51st places at the other two.
Fellow Australian Steph Kyriacou also posted an even-par 72.
But unlike Lee's sloppy finish, Kyriacou fought back from a double-bogey start with two birdies to be level with the card.
New world No.1 Atthaya Thitikul, who is also in the player-of-the-year mix, started with a one-under 71 to be tied 30th.
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