OSHIMA, Japan (AFP) - Rescuers in Japan on Thursday picked through mud and broken buildings after a typhoon killed at least 18 people, as hopes fade for dozens still missing following a landslide that engulfed their homes.

Hundreds of police, firefighters and troops searched through the night in an area where houses were swallowed when a mountainside collapsed.

Typhoon Wipha, dubbed the strongest in a decade, never actually made landfall as it surged past Japan, but searing winds and torrential rain set off mudslides that buried neighbourhoods on Oshima.

At least 17 people died and 39 people were still missing on the island, which lies 120 kilometres south of the Japanese capital, a local official told AFP.

One woman died in western Tokyo, police have said.

On Oshima, about 15 police officers were using chainsaws and shovels to free the body of an elderly woman, buried in mud and the smashed remains of a wooden building, an AFP reporter said.

Elsewhere, troops who arrived on the island on Wednesday morning just hours after it was raked by the storm, fanned out on paths up a mountainside shouting: "Is there anybody there?" Spokesman Yoshinori Sano said the men - who had not slept - were "hopeful" of finding survivors among the devastation.

Resident Tadashi Sogi said his house had been swept 30 metres, with much of it engulfed by the thick mud.

As he loaded his car with a few salvaged belongings - including a photograph album - he said he was going back to join the rescue effort.

"The lives of other people come before all these things," he said, gesturing to his soiled mementos.

Some of the around 8,000 people who live on the island had sought shelter in evacuation centres as the huge storm approached, reporting water gushing into their homes.

But criticism was growing Thursday of the island's mayor, Masafumi Kawashima, who did not issue an evacuation advisory, despite repeated warnings from meteorologists about the size of the typhoon.

Kawashima, who was away at a conference when the storm hit, told reporters he regretted not having told people to seek safety.

"I'd feared issuing an evacuation advisory in the middle of heavy rains in the dark could lead to a secondary disaster. But in retrospect, I think that was naive," he said.

Most of Japan, including the heaving capital, was spared the worst of the typhoon, although three other people were still officially missing in the greater Tokyo area.

They were two elementary schoolchildren who were believed to have been near a beach in Kanagawa prefecture, and a man in his 50s who had not been heard from since alerting authorities to a landslide near his house in Chiba prefecture.

Flights in and out of Tokyo were back to normal on Thursday, after about 400 cancellations on Wednesday, affecting more than 60,000 passengers.