=Goalkeeper Sarvar Karimov saved penalties from Tokuma Suzuki and Koki Sugimori to become the hero for Uzbekistan in a match that had finished in a 1-1 draw in regulation time.
"People say that we geared our performances up in the knockout stages but we have been consistently performing throughout the tournament," said Uzbekistan coach Dilshod Nuraliyev.
"In the group stages the boys were shy to convert their chances but with the progression of the tournament they became more accurate and we became stronger.
"To be very honest, Japan were superb but we converted the only good chance that came in our way and extended the match to a penalty shootout and kept composure during the shootout. In one way, we were lucky and they were unlucky, that's football.
"Now we won't be resting on the laurels as we have to work really hard to get something out of next year's FIFA U-17 World Cup in the United Arab Emirates."
The Japanese had taken the lead as they sought their record third AFC U-16 Championship title through Takuma Mizutani after just six minutes, but Uzbekistan levelled via Akobir Turaev seven minutes after half-time.
The two nations - along with semi-finalists Iraq and Iran - will represent Asia at the FIFA U-17 World Cup in the United Arab Emirates next year and Japan coach Hirofumi Yoshitake is hoping his players can learn from their defeat in the final.
"In this type of situation you need mental strength. I am not going to blame my players, may be the goalkeeper was good and may be the qualities of the shots were not perfect," he said.
"We will continue to develop; we need to address few things before we go to the FIFA U-17 World Cup 2013 in the United Arab Emirates."