Kashiwa Reysol beat Monterrey 4-3 on penalties to set up a Club World Cup semi-final against Santos.
Leandro Domingues put the Japanese side ahead early in the second half of normal time but Humberto Suazo quickly equalised and the game went into extra time and then spot-kicks.
And after Luis Perez and keeper Jonathan Orozco missed for Monterrey, Ryohei Hayashi won the game for Kashiwa.
Kashiwa keeper Takanori Sugeno was forced into an early save from Neri Cardozo after Suazo wasted the initial chance, and Chile striker Suazo then crashed a shot against the post from Cesar Delgado's cross.
Luis Perez then curled a free-kick just wide, though Jorge Wagner and Junya Tanaka went close for Kashiwa before half-time.
It was 1-0 to Kashiwa eight minutes after the restart, Domingues meeting Tanaka's cross with a superb acrobatic volley past Orozco.
But Hiroki Sakai missed a simple headed chance to make it 2-0 and was immediately punished when Suazo levelled, sliding in to convert Delgado's cross.
Domingues missed a late chance and extra time proved uneventful before the shoot-out started with Sugeno saving from Luis Perez, allowing Domingues, Wagner and Ryoichi Kurisawa to put the Japanese side 3-2 lead.
Both sides missed their fourth spot-kick, Orozco hitting the post before saving from Tanaka, but after Cesar scored to put the pressure on Kashiwa's final taker Hayashi, the substitute netted to send his team through.