Jayaram, who came into the match with a 0-2 head-to-head record against the Korean, lost 23-25 13-21 in a 44-minute battle to bow out of the contest at the Seong-nam Indoor Stadium here.
Jayaram, ranked 27th in the world, was 14-11 ahead at one stage but Lee caught up with a seven-point burst to turn the tables on the Indian. Lee reached the game points at 20-17 but Jayaram saved three game points and was in fact 23-22 up, but he could not finish it as the local shuttler held the bragging rights.
Jayaram had lost to Lee at the Canada Open earlier this year.
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