He violated the "no-drinking period" of 12 hours before the start of flight duty, said Japan's Ministry of Land, Infrastructure, Transport, and Tourism, The Straits Times reported.
The ministry has issued a warning to the airline and requested a report by March 7 on measures it will take to prevent a similar incident in the future.
Investigations revealed the captain drank two cans of beer, approximately one liter in total, between 1:30 p.m. and 2:00 p.m. on Jan. 6, which fell within the 12-hour window before his flight duty, Japan News reported.
While the pilot was not under the influence on Jan. 7, the day flight MM774 departed for Kansai, both he and his co-pilot failed to take a mandatory pre-flight alcohol test.
The pilot was also found to have provided false information when questioned by Peach Aviation.
The violations came to light when another official responsible for alcohol tests noticed they had not been conducted on Jan. 7, prompting the airline to launch an internal investigation.
Peach Aviation stated that it takes the incident seriously and will conduct a thorough analysis of what happened.
The airline also pledged to restore trust by strengthening safety measures, including stricter alcohol regulations, and overhauling its alcohol-testing procedures.