Shin carded a four-under 68 to be level with local hopeful Ayako Uehara at the Kintetsu Kashikojima Country Club.
Shin, the British Open champion, immediately made her run after starting on the back nine with a hat-trick of birdies from the 12th.
The 24-year-old had been set for a blemish-free round until she misjudged a putt on the ninth to drop back level with Uehara.
The pair were a shot ahead of a group of six players including defending champion Momo Ueda.
Ueda was joined by China's Shanshan Feng, who she beat in a play-off last year, as well as Angela Stanford, Beatriz Recari, Choi Na-yeon and Maiko Wakabayahi.