The loss drops the Thornhill, Ont., product to 41-18 on the year, but Raonic is currently in 10th position in the battle for the eight-player season-ending Barclays ATP World Tour finals in London next month.
"The improvement in the rankings is icing on the cake," said Raonic. "The important thing to me is getting better as a player. As long as I can do that, I will give myself more opportunities like this."
Raonic is now 5-5 in title matches, having won his fifth ATP title at the Thailand Open in Bangkok last week. The third-seeded Raonic hit 17 aces but came up short in his second straight appearance in the Japan Open final. He lost to local favourite Kei Nishikori last year.
The first set lasted 54 minutes and included a rally by del Potro that bounced him back from a 0-2 deficit in the tie-break. Though Raonic put pressure on the Argentine throughout the set, he could not capitalize.
Tied at 5-5 in the second set, del Potro locked in and broke Raonic to go up 6-5, then held serve to secure the 7-5 victory.
"There is nothing really to be down about," Raonic said. "Maybe the double fault in the tiebreak and then later in the match to break me he gets four winners so there is not much I could have done there to play better."
After the match, Raonic congratulated his opponent and thanked the fans for showing their support throughout the tournament. Nobuo Kuroyanagi, the President of the Japan Tennis Association, then presented del Potro with the 16th tour-level trophy of his career.
Del Potro, the 2009 U.S. Open champion, was a late addition to the tournament after Andy Murray withdrew due to a back injury. The Japan Open marks his third title of the year, adding to wins in Rotterdam and Washington.