Loeb now leads the overall standings by 33 points

The Citroen driver beat his Finnish rival by just 5.6 seconds after 27 stages to extend his championship lead over the Ford driver to 33 points.

The Frenchman, who also holds the mark for the number of successive victories, had shared the record of 26 wins with retired Spaniard Carlos Sainz.

Gronholm's team-mate Mikko Hirvonen finished in third place.

Gronholm, who now has just five more rallies to catch Loeb, won 15 of the stages but paid the price for two big mistakes on Saturday that cost him more than 30 seconds and the lead.

However, the two-times champion pushed hard on Sunday in the closest battle he and 32-year-old Loeb have had all year.

I've no regrets about today. I couldn't have gone any faster Marcus Gronholm

"To finish with just five seconds lead is incredible," said Loeb, who has broken Sainz's record in less than four years.

"The record is important but it's not my first motivation. The most important thing is the championship.

"But when you are in a battle like we were with Marcus, you really want to push to the end. It was really close, really difficult mentally, but we got it."

The win was double world champion Loeb's seventh of the season from 11 races and his first in Japan, which made its championship debut in 2004.

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Gronholm, who has won the other four races, said: "I've no regrets about today. I couldn't have gone any faster.

"The race was won and lost on Saturday when perhaps I was pushing a bit too hard."

Australian Chris Atkinson finished fourth for Subaru, who struggled with brake problems in their home event, with Austrian Manfred Stohl fifth in a Peugeot.

Citroen's Daniel Sordo, who had finished seventh, was disqualified afterwards after an incident on the penultimate stage.

The Spaniard was penalised for not fastening his seat belt after leaving his car when he was held up by a stranded competitor.

Rally of Japan result:
1. Sebastien Loeb (Fr) Citroen 3:22:20.400
2. Marcus Gronholm (Fin) Ford 3:22:26.000
3. Mikko Hirvonen (Fin) Ford 3:25:06.900
4. Chris Atkinson (Aus) Subaru 3:28:28.200
5. Manfred Stohl (Aus) Peugeot 3:29:31.100
6. Toshihiro Arai (Jpn) Subaru 3:31:25.500
7. Petter Solberg (Nor) Subaru 3:34:04.100
8. Fumio Nutahara (Jpn) Mitsubishi 3:45:17.800
9. Gabriel Pozzo (Arg) Mitsubishi 3:45:45.200
10. Marcos Ligato (Arg) Mitsubishi 3:46:19.000

Overall driver standings:
1. Sebastien Loeb (Fr) 102 pts
2. Marcus Gronholm (Fin) 69
3. Daniel Sordo (Sp) 41
4. Mikko Hirvonen (Fin) 33
5. Manfred Stohl (Aut) 28
6. Petter Solberg (Nor) 22
7. Toni Gardemeister (Fin) 16
8. Henning Solberg (Nor) 16
9. Gianluigi Galli (It) 15
10. Chris Atkinson (Australia) 14

Overall constructor standings:
1. Kronos Citroen 132
2. Ford 121
3. Subaru 74
4. OMV-Peugeot 50
5. Stobart-VK Ford WRT 29
6. RedBull-Skoda 22