The undefeated 33-year-old was a class above his Costa Rican challenger for the vast majority of the bout before a prolonged flurry of strikes in the dying seconds of the eighth forced the referee to step in.
It was the title-holder's 16th win inside the scheduled distance, bringing his tally to 19-0-1 and inflicting upon the 25-year-old Vasquez his first defeat in 30 bouts.
The bout capped a good New Year Supershow for the live crowd in Tokyo, with success for Japanese fighters across the board.
Kohei Kono shocked defending champion Tepparith Kokietgym with a fourth-round KO to win the WBA super-flyweight belt.
The 24-year-old Thai fighter was the heavy favourite heading in, but was knocked down three times before the referee stopped the bout after 2:08 of the fourth.
Kokeitgym had never been put onto the canvas in his previous 23 fights and had won his last 18, but any talk of him overtaking WBO kingpin Omar Narvaez as the 115lb linear champion have been put on ice by 32-year-old Kono's dazzling display in front of his home city crowd.
The victory gives Kono's his first world championship at the third attempt and improves his record to 28-7, with his 11th knockout also marking the finest moment in his 12-year career so far.
In the only all-Japanese title fight on the card, Yota Sato retained the WBC super flyweight belt with a strong unanimous decision over Ryo Akaho to end the challenger's unbeaten record.
The three ringside judges all scored the contest in favour of Sato, 117-112, 117-111 and 118-110, to bring the incumbent's record to 26-2-1 and the defeated Akaho's to 19-1-2.
- Sports & Recreation