Hosts India, on their HSBC A7s debut, finished on a disappointing note by losing the Shield final to Iran, also marking their debut, to finish fourteenth out of sixteen participants. Iran won 27-7, dashing the hopes of a large crowd of vocal home supporters, who were happy with the hosts' 43-0 hammering of Pakistan earlier.
India had lost all their pool matches on Saturday and were fighting for minor placings.
It was a winner-take-all scenario as Japan and Hong Kong emerged as the finalists at the third and final ranking leg of the championship.
And after many years of reverses, including losing the 2010 Asian Games gold medal match and the 2009 East Asian Games finale to Japan, Hong Kong turned the tables on the Asian juggernaut with an inspired performance scoring four tries to one to clinch the crown for the very first time.
"This is a magnificent victory. It has been two to three years in the making - to be crowned Asian champions," said an overjoyed Hong Kong coach Dai Rees.
"It is extra sweet as we have lost to Japan so many times in the past in big games, like at the Asian Games gold medal final in Guangzhou (in 2010) and the East Asian Games final (2009). This year too, at the Hong Kong Sevens, we lost to Japan and failed to qualify for the World Series so this win is very satisfying," Rees said.
By finishing top two in the Asian rankings, Hong Kong and Japan are also assured of being seeded in different halves of the draw for next month's final leg in the HSBC Asian Sevens Series in Singapore, which also doubles as the Asian qualifiers for next year's Rugby World Cup Sevens in Moscow. Three teams from Asia can qualify.