The colourful former Wallabies coach saw his team fall narrowly short of a first victory over Australia, going down 19-15 in Tokyo.
Japan could not find a way past Australia despite launching a second-half comeback in the rain but Jones believes they can pull off an upset against the Springboks.
Jones masterminded Japan's stunning victory over South Africa at the 2015 World Cup in England and the teams are set for a rematch next Saturday in London.
"I think this team is a better team than the 2015 team, I think they've got the potential to be better," Jones, who returned last year for a second stint as Japan coach, said of his men.
"We're going there thinking we can win. South Africa are like everyone, you get in their face, put pressure on them and they can make mistakes.
"That's what we intend to do."
Jones said beating the back-to-back world champions at the famous London stadium would be on a par with "the Coldplay concerts" there.
"Wembley's a good stadium to do it at," said the Australian.
"Imagine beating South Africa at Wembley. That would be iconic."
Japan fell behind in the first half as Australia scored two tries, through captain Nick Champion de Crespigny and Josh Flook.
Jones said his players were "like spectators" for the first 30 minutes but praised the way they got back into the game.
"We don't go away, we stay in there, we kept going," he said.
"I think for a young team they can take a lot of positives from it.
"Really disappointed with the result but in terms of the performance and in terms of the fight, it's a real step up for us again."
Jones said Japan's second-half performance proved they "can take on the best in the world and compete".
"We want to show the game that we played in the second half for the full 80 minutes against South Africa," he said.
"That's our challenge."