Typhoon Neoguri lashed Japan's southern Okinawa islands, reportedly leaving two dead and forcing more than half a million to seek shelter, as the region's worst storm in years damaged buildings, downed trees and brought air and sea traffic to a halt.

The Japan Meteorological Agency downgraded all severe warnings for Okinawa early Wednesday after the typhoon passed, packing gusts of up to 216 kilometres (134 miles) per hour with torrential downpours and forcing the cancellation of hundreds of flights.

In the capital Naha, traffic lights went out and television footage showed split trees, signboards flying about and a destroyed restaurant, with the shattered building blocking a street.

The coast guard and local police said a 62-year-old man was found dead after he was knocked off his boat in rough waters near Japan's mainland, while public broadcaster NHK said an 81-year-old fisherman died in southwestern Kumamoto prefecture.

Separately, Okinawa police said at least four people were hurt, with NHK putting the number of injured at 25.

Schools across the sprawling archipelago were also closed while nearly 70,000 Okinawan households had no power, NHK said.

"We have no water or electricity, but the gas is still on," said Takuro Ogawa, who lives in Chatan, a town in central Okinawa.

Late Monday, the Japan Meteorological Agency issued its highest typhoon alert for Okinawa's main island, home to around 1.2 million people, as well as the outlying Miyako islands. The alerts for the Miyako region were also downgraded Tuesday evening.

Authorities had warned of a risk to life, as well as major property damage from the typhoon and subsequent flooding and landslides.

Officials called on some 590,000 people across Okinawa to take shelter in their homes or evacuate to community centres and town halls.

"We have urged residents to evacuate when they see any danger," a local municipal official told AFP.

- 'Serious danger' -

Neoguri struck less than a year after Typhoon Haiyan, packing the strongest winds ever recorded on land, left more than 7,300 people dead or missing as it tore across the central Philippines in November.

Japan, a wealthy nation with strict building codes, has a strong track record of making it through major storms comparatively unscathed in the last few decades.

Nonetheless, Japanese officials had urged people to take the threat posed by Neoguri seriously.

The World Meteorological Organization said Neoguri was not as powerful as Haiyan, but that "its impact is not to be underestimated".

"It is expected to remain at strong intensity for the next three days at least," spokeswoman Clare Nullis told a UN briefing in Geneva.

US astronaut Reid Wiseman posted two dramatic views of the swirling typhoon from the International Space Station, with the images from his Twitter account re-tweeted more than 5,000 times.

The Kadena Air Force Base, the biggest US Air Force base in the Pacific located on Okinawa's main island, evacuated some of its aircraft as the storm approached.

Downgraded from super typhoon status, the storm was located some 590 kilometres (370 miles) southwest of Sasebo at 6 am local time (2100 GMT Tuesday), the US Navy's Joint Typhoon Warning Center said. It was moving northwards at 20 kilometres (13 miles) an hour.

The powerful system, still packing winds with gusts of up to 200 kilometres (130 miles), could reach the southern main island of Kyushu late Wednesday or early Thursday, with the weather agency warning that a large downpours could spawn landslides and flooding.

Kyushu -- situated next to the main island of Honshu, where major cities including Tokyo and Osaka are located -- was already experiencing heavy rain.