Just four months back, Prannoy had created a flutter when he dispatched Chong Wei in straight games in the Indonesia Super Series Premier and the unseeded Indian dished out another superb performance on Thursday to oust the former World No. 1 Malaysian 21-17 11-21 21-19 in a match that lasted an hour and three minutes.
Saina, who won a bronze in the Glasgow World Championship, defeated Marin 22-20 21-18 in a hard-fought battle.
Kidambi Srikanth, who lost in the quarterfinals in Japan Open, remains the highest-ranked Indian male player at eighth.
With this victory, Axelsen enjoys a 3-2 head-to-head lead over Srikanth in five meetings, having won the last three duels.
Olympics medallists PV Sindhu and Saina Nehwal crashed out of the USD 325,000 Japan Open Superseries after suffering straight-game defeats in second round on Thursday.
Saina took 39 minutes to dispatch Thailand's Pornpawee Chochuwong 21-17 21-9 in the women's singles opening round.
Twelve Indian male badminton players are currently ranked in the top 100, with seven in the top 50.
Sourabh Verma also reached the quarters after emerging victorious in an all-Indian pre-quarterfinal battle against Parupalli Kashyap.
Shuttlers HS Prannoy and Parupalli Kashyap entered the pre-quarterfinals of the New Zealand Grand Prix Gold.
HS Prannoy will cross swords with Indonesia's Firman Abdul Kholik and Kashyap will square off against local shuttler Oscar Guo on Wednesday.
HS Prannoy notched up a thrilling three-game win over Commonwealth Games champion Parupalli Kashyap in an all-Indian final to clinch the USD 120,000 US Open Grand Prix Gold
On a comeback trail, Kashyap reached his first semifinals of an international event in seven months after defeating compatriot Sameer Verma 21-13, 21-16 in 40 minutes.
Second-seed Prannoy squandered an opening game advantage to go down 21-17, 14-21, 13-21, to ninth seed Jeon Hyeok Jin of Korea.
Parupalli Kashyap requested External Affairs Minister Sushma Swaraj and Sports Minister Vijay Goel to look into the matter.
Kidambi Srikanth beat top seed Son Wan Ho 21-15, 14-21, 24-22 in the Indonesia Open Super Series semi-final and will now face Japan's Kazusma Sakai for title on Sunday.
The second game was a roller-coaster ride as Sakai opened up a 5-1 lead after dominating the rallies early on. The Indian narrowed the gap to 4-5 with the help of his smashes.
The 24-year-old will next play Kazumasa Sakai of Japan in the semifinals tomorrow.
Prannoy will take on the winner of the match between Japanese qualifier Kazumasa Sakai and England's Rajiv Ouseph.