With the south-coast club and Wolfsburg deadlocked after a thrilling four-goal first-half, James attempted to dribble around Zvjezdan Misimovic but succeeded only in gifting the ball to the Bosnian, who rolled it into the net.
With Braga winning at Heerenveen, even a draw at the Volkswagen Arena would not have left Pompey with a chance of progressing from Group E, but James' calamitous error with 16 minutes remaining summed up a heart-breaking night as they crashed 3-2.
After seeing James bounce back to save a late spot-kick from Misimovic, Adams said: "He's a fantastic keeper.
"He saved a penalty, set up the first goal - he's a great keeper and I have every faith in him and love him to bits.
"He's been in the game a long time and there's nothing I can say to him."