Team Melli lost to Australia 30-24 at the Kumamoto Prefectural Gymnasium in Kumamoto, Japan.
On Sunday, host Japan will face South Korea in the final match, while China and Kazakhstan battle for the bronze.
The 2018 Asian Women's Handball Championship is the 17th edition of the Asian Women's Handball Championship, is being held from 30 November to 9 December 2018 in Kumamoto, Yamaga and Yatsushiro, Japan.
The tournament is held under the aegis of Asian Handball Federation and will act as the Asian qualifying tournament for the 2019 World Women's Handball Championship.