The 23-year-old from Thornhill, Ont., now holds the eighth and final qualifying spot for the ATP World Tour Finals which begins Nov. 9 in London.
Raonic has been aiming for a place in the elite eight-man field all season after missing out in the points race a year ago. But with the remainder of the Japan Open plus the Shanghai Open next week and three more weeks of ATP season play, nothing is guaranteed for Raonic.
"I've put it all at the back of my mind," said Raonic. "My goals has always been to do well at everything I play. I want to finish the year well — that's where my motivation is coming from."
Raonic lost the last two finals in Tokyo and will try to reach his third consecutive Japan Open final when he faces France's Gilles Simon on Saturday.
The unseeded Simon advanced to the tournament's four with a 7-6 (4), 6-1 win over American Steve Johnson.
In other quarter-finals, Japan's Kei Nishikori defeated unseeded Jeremy Chardy of France 6-4, 6-2 while German Benjamin Becker edged American Jack Sock 4-6, 6-1 6-4.
Raonic improved his 2014 record to 42-13 and now stands 13-4 at Tokyo's Ariake Colosseum in career ATP play.
Raonic won in 79 minutes with 15 aces and one break of serve. His own serve was never threatened by 60th ranked Istomin.
But Raonic had hoped to be quicker out of the blocks.
"I struggled to find rhythm at the start, but I played a good tiebreak so I have to be happy," said Raonic. "I was able to improve more and more as I went along."
Neither player cracked in the 47-minute first set, with Raonic firing an ace to take it into a tiebreaker.
Raonic was put to work in the decider, saving an Istomin set point while requiring three of his own to finally win it after Istomin followed a double-fault with a backhand into the net.
The second set went much smoother for Raonic, who scored the only break of the match for 5-3 and closed out the win a game later after serving up a double-fault on the first of his three match points. He advanced on his third chance as Istomin hit the net with a return.
The Canadian stands 2-0 over Simon, whom he beat at the French Open this year.
"I've done well against him but I always want to do better, that's the match situation right there," said Raonic.