A Ki Sung-yong penalty had put the Koreans ahead in the 23rd minute but Ryoichi Maeda equalised nine minutes before the break.
Neither side could add a second in the second half meaning extra time was needed where Japan took the lead for the first time in the 97th minute through Hajime Hosogai.
Hwang Jae-won scored a dramatic leveller seconds before the whistle to force penalties but Korea Republic failed to convert any of theirs while only Yuto Nagatomo missed for Japan to keep Alberto Zaccheroni’s side on course for a fourth Asian title.
Shinji Okazaki was looking lively for Japan from the outset and he was the first to threaten after nine minutes when he headed just wide, and the Shimizu S-Pulse striker went even closer in the 18th minute as his powerful downward header was pushed onto the post by Korea Republic keeper Jung Sung-ryong.
It proved a crucial save as the Koreans took the lead five minutes later when Yasuyuki Konno pushed Park Ji-sung in the area and the referee immediately pointed to the spot. Ki stepped up to confidently convert the penalty beyond the reach of the diving Eiji Kawashima.
That goal opened the game up considerably and Keisuke Honda directed a powerful header from Atsuto Uchida’s cross straight into the hands of Jun while Koo Ja-cheol headed over from a Korea Republic free-kick soon after.
But Japan were back on level terms nine minutes before the break when Honda’s smart ball sent Yuto Nagamoto through on the left of the area before the defender cut a pass back to Maeda, who fired home from the middle of the box for his third of the tournament.
Koo had Korea Republic’s first chance of the second half when he was picked out by Ji Dong-won inside the area and the Jeju United midfielder wrestled his way between two defenders, but could only stab his shot into the sidenetting.
But the second period failed to match the pace of the first with Lee Yong-rae’s 71st minute free-kick curling inches wide of the upright and Okazaki’s shot at Jung the only efforts of note before the end of normal time.
Japan took the lead seven minutes into extra time when Hwang needlessly pushed Okazaki inside the area and the referee awarded the penalty, and though Honda’s weak spot kick was denied by Jung the alert Hosogai rushed in to smash the loose ball into the roof of the net.
It seemed as though that strike would be enough to send the Japanese through but the Koreans equalised in dramatic fashion when a Ki free-kick with seconds remaining was headed back into the danger zone by Kim and Hwang swept home in the ensuing goalmouth scramble.
Consequently penalties were needed to separate the two and Kawashima twice pulled off saves while Hong Jeong-ho sent his side before Konno converted to send Japan through to the final.