While Yates recorded his best result yet in four Grand Tours, the Orica-Scott rider also moved up to 11th on GC ahead of the decisive third and final week of the 100th Giro.
"I didn't quite have it in the sprint. I felt good in the finale but Jungels is a good 10kg heavier than me and I couldn't match his power," Yates said of the stage won by Bob Jungels (Quick-Step Floors).
"I hit out just after 300metre to go, but perhaps I went too early. I hit the front in the final 50metres before everyone flew past me. Congratulations to Bob Jungels though, it was a good victory."
Yates was sitting in third place overall on the morning of the first summit finish of the race to Blockhaus only to drop to 16th after being involved in a crash with a police moto. While the likes of Geraint Thomas was ultimately forced to abandon the race due to his
injuries from the crash, Yates escaped with only minor injuries and had steadily been improving his GC position in the second week.
The 24-year-old explained that the work of his teammate has been instrumental in climbing the GC and is looking forward to finishing off the Giro in his preferred terrain of the mountains.
"The team were great again today. We sat back and waited for the break to form and that took almost 100km. Then we committed to the stage and the boys really laid it down," Yates added.
"All-in-all another good day. We will enjoy the rest day tomorrow and get set for a big final week."
Yates though won't be able to count on the work of teammate and sprinter Caleb Ewan who will be a non-starter on Tuesday. Alexander Edmondson's future in the race is uncertain with the Australian's injuries to be assessed on the rest day before a decision is made whether he continues.