Former finalist Dominic Thiem asserted on Tuesday that he was in peak condition and poised to make an indelible mark at the upcoming Australian Open, despite suffering a setback with a loss at the Kooyong Classic to kick off his preparations for the Grand Slam event.

The 2020 finalist at Melbourne Park, who is 99 in the world as he returns from a wrist injury, showed flashes of his best in a 6-4, 6-4 loss to Australian Alex de Minaur at Kooyong.

The 29-year-old Thiem won the United States Open in 2020 but injured his right wrist in mid-2021 and was sidelined for eight months.

"The body is good; last year was a good step in the right direction," said the Austrian, who pushed Novak Djokovic to five sets in the 2020 Australian Open final.

"I hope I can continue in that direction this year. Hopefully, the Open is a good start."

The former world No. 3 has shown encouraging signs on his return to the tour, rising from outside the top 350 to breach the top 100 this week after semifinal runs last year at Gstaad, Gijon and Antwerp.

His rapid ranking rise meant he only narrowly missed directly qualifying for the main draw of the Australian Open, which starts in Melbourne on Monday.

But he was handed a wild card entry and, after twice fighting back from a breakdown against De Minaur, remains optimistic about his chances.

"I'm ready to go at the Grand Slam, but I don't know how good I am at the moment," he said.

"It's tough to go deep in a Slam; all of the players are on a high level. But I had a good preparation so I should be ready – we'll see."

He added that the injury was "an interesting experience; probably every top athlete will face at least one major injury during a career."

"My wild card is a big honor and a big possibility (to do well). If I have the chance to do some damage, we will see if I can make that happen," he said.

"I'm glad I've left my injury behind; the body feels good."