Japan were unbeaten against the West Asian side in their last nine games and Iraq's victory on Friday (Saturday AEDT) propelled them to the top of the group standings with six points from two games while Hajime Moriyasu's side have three points.
"Today is a great day for Iraqi people but for us it's just a win. We have six points, but the players must now think of Vietnam (in the last group game) and they need to rest," Iraq coach Jesus Casas told reporters.
"I'm very proud of my players. All Iraqi players should be proud... The perfect match is impossible, but we were close to the perfect match I wanted."
Roared on by thousands of their supporters in the stadium, Iraq got on the board inside five minutes when Japan goalkeeper Zion Suzuki failed to deal with a cross, parrying the ball straight to Hussein who headed it into the top corner.
Japan had a golden opportunity to equalise in the 22nd minute from a set piece when a header fell to Wataru Endo at the edge of the six-yard box, but the skipper was unable to direct an overhead kick into the net.
Iraq doubled their lead on the stroke of halftime when Ahmed Al-Hajjaj skipped past his marker and floated in a cross that was headed home from point-blank range by Hussein.
But Hussein went down injured just before the break and was replaced for the second half and though Iraqi fans were dejected when their hero did not take the field, they found their voice again when Japan were denied a penalty despite a VAR check.
Moriyasu made five substitutions after the restart but the Samurai Blue rarely tested the keeper until the 94th minute when Endo headed home at the far post from a corner.
The atmosphere was tense in the dying minutes as Japan frantically sought an equaliser but Iraq held on for the three points to move top.
