The 19-year-old reigning world junior champion shocked the Japanese favourite with a straight games 21-18, 21-19 victory.
The 19-year-old reigning world junior champion shocked the Japanese favourite with a straight games 21-18, 21-19 victory and now meets Thailand’s Ratchanok Intanon in the quarter-finals.
In the second game, Chen clawed her way back from 11-14 behind, winning six points in a row and then claimed: “This is the greatest result of my career."
“It was one of my goals this year to beat Akane and now I have achieved it. I am very excited and so happy."
“In the middle of the second game I started to make some mistakes. But then I got myself together. I came to these Championships with several goals. This was the biggest one."
“Now I am just going to take it day by day. I am really looking forward to the quarter-final.”
Akane, the world number two, was desperately disappointed.
“I am very sad,” she admitted. “I made too many errors but she played well.”
South Korean second seed Sung Ji Hyun also made a shock exit losing to India’s Saina Nehwal 21-19, 21-15.
Newhal had surgery on her knee after a disappointing Olympic Games and now admits she was in agony for the most of last year.
“But now I’m trying to forget about pain,” she said. "Today was extremely tough. I have beaten her in the past, but she has been so consistent this year. I am absolutely delighted to get through to the quarter-finals.”
In the men’s singles, top seed Son Wan Ho needed three games to overcome Thailand’s Tanongsak Saensomboonsuk and set up a quarter-final against India’s Kidambi Srikanth.
The world number one from South Korea was on court for over an hour before going through 21-14, 17-21, 21-13.
"It was a very tough game,” he admitted. “But I am already looking forward to tomorrow’s match. The win has helped make me more confident after my recent injury because my season so far has been about recovery."
China’s Lin Dan is doing it the hard way in his bid for a sixth men’s singles victory.
For the second day in succession, the 33-year-old had to come from behind and spent a gruelling 81 minutes on court before overcoming England’s Rajiv Ouseph 14-21, 21-17, 21-16.
“It was tough,” admitted Dan, who won the last of his five titles in 2013.
“He started so quickly and it took a while for me to get a hold of the situation."
“I also started slowly yesterday, but I am just doing my best. I think I am improving in each round.”
Viktor Axelsen, the top European hope, cruised into the quarter-finals with a 21-13, 21-18 victory over Hong Kong’s Ng Ka Long.
India’s Pusarla Sindhu won the longest singles match of the championships so far. The Indian fourth seed beat Hong Kong’s Cheung Ngan Yi 19-21, 23-21, 21-17 in one hour 27 minutes.
Meanwhile, defending champions Chen Long and Carolina Marin, who are also the 2016 Olympic gold medallists, both cruised through to the quarter-finals.
China’s Chen beat India’s Ajay Jayaram 21-11 21-10 and Marin ousted the final unseeded player in the women’s event, Mia Blichfeldt of Denmark 21-7 21-11.