The Brave Blossoms scored their record number of points against the All Blacks having lost by an average of 84 points in the three previous meetings.
The crowd at Tokyo's Ajinomoto Staidum, which will host the opening match of the World Cup, were treated to some vibrant attacking play from Joseph’s men as well as some slack defending in the 100-point try-fest.
"We are obviously disappointed with the loss but I am not disappointed with the intent of my team," said Joseph, a former All Black himself.
"That we scored five tries against the All Blacks is a sign that we have improved, especially against the best team in the world."
"We still got a long way to go until the World Cup and until we get our game to a level where we can beat tier-one teams."
Against a second string All Blacks side featuring eight debutants, Japan looked dangerous with ball in hand and Joseph was left to regret the missed opportunities, especially in the second half.
"We kicked the ball too much and we should have kept the ball in hand to apply pressure that way."
"This comes down to a little bit of inexperience."
All Blacks boss Steve Hansen was also impressed by Japan's performance.
"Japan are getting better and better all the time," said Hansen, who was in charge when New Zealand crushed Japan 54-6 in 2013.
"Anybody that came to the game today will have enjoyed what they saw from Japan; a bit of razzle-dazzle, quite a bit of physicality at times."
"They are trying to play a form of rugby that suits them and if you get it wrong they will hurt you."
Japan have never progressed out of the pool stages at a World Cup but, after their famous victory over powerhouse South Africa in England last time out, the host nation are hopeful of reaching the quarter-finals next year.
Joseph's Brave Blossoms will take on England, guided by former Japan coach Eddie Jones, at Twickenham later this month before taking on World Cup opponents Russia in Gloucester. (Reporting by Jack Tarrant Editing by Amlan Chakraborty)
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