The 25-year-old put in a time of 7:19.02 minutes - far from his best - but lead the race throughout only to lose out in the very final second. Hungary's Bendeguz Molnar Petervari came on top with a time of 7:18.88 minutes.
Bhokanal, who is competing in his maiden Olympics, will now fight for a world ranking between 13 and 18.
Bhokanal, who set his Olympic best in the quarter-final with a 6:59.89 minutes, took 1:44.88 minute to cover his first 500 metres before completing the 1000m mark in 3:37.00 minutes.
He was leading till the 1500m mark, covering it in 5:30.35 minutes before the Hungarian overtook him with only a handful of meters left in the race.
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