Woods, who trailed Yokoo by eight at the start of the round, finished at 9-under-par 275, but was able to make a charge at the beginning of Sunday's final 18. He dropped a 20-foot birdie putt at the par-3 third and collected back-to-back birdies at seven and eight to reach 8-under par.
The top-ranked player in the game missed a four-footer for birdie at the ninth that essentially ended his chances at a miraculous comeback.
'The putt I missed on nine put me pretty far behind,' Woods said. 'Kaname had already gone to 17-under, so I needed to make that putt to go to 9-under and then shoot 6- or 7-under par on the back nine.'
Woods birdied the par-4 13th for the first time in the tournament when he drove the edge of the green. He chipped to six feet and converted the birdie putt.
Throughout the entire tournament, Woods played solid drives and hit good iron shots, but his putting never came around.
'I played well the last three days, but didn't putt well until today,' Woods said. 'Even if I had made a run today, there were a lot of guys between me and the leader, like Sergio (Garcia) and Justin (Rose), who were playing well so it would have been tough to make a run.'
Woods made his third appearance in Japan after the 1998 Casio World Open and the 2001 WGC-World Cup. He would like to return next year, but a scheduling conflict may prevent that from happening.
'I'd like to come back next year,' said Woods. 'But it will all depend on my schedule because I think there may be a conflict with the Presidents Cup.'
Yokoo held a one-stroke lead after the third round and looked to put the tournament away early in Sunday's final round. He birdied the first four holes, but faltered on the back side.
He tallied only one birdie against three bogeys on the back nine, but it was enough for his first title since the Japan PGA Matchplay Championships in 2000.
'It's a great relief,' said Yokoo, who finished the tournament at 15-under-par 269. 'I didn't play that well near the end, but fortunately had a bit of a cushion.'
Spain's Sergio Garcia finished one stroke behind at 14-under 270, while South Korea's K.J. Choi was third at 13-under after a final-round, 7-under-par 64.
Darren Clarke, who trailed by one after the third round, shot an even-par 71 to share fourth with Justin Rose at 12-under-par 272.
David Duval, the 2001 champion, shot a 68 to finish at 11-under-par 271. He tied for sixth place with Japan's Hiroyuki Fujita.
Final results from the Dunlop Phoenix Open