It seems like yesterday that Hayao Miyazaki, the master of Japanese anime, was making his US debut with The Princess Mononoke, a lush, deeply imagined environmental allegory. That 1997 movie was the first time many American filmgoers entered Miyazaki's world of myth, magic and lyrical, finely detailed imagery; happily, there are now generations of children who have grown up cherishing such Miyazaki classics as My Neighbour Totoro, Kiki's Delivery Service, Spirited Away and Howl's Moving Castle the way their parents did Snow White, 101 Dalmatians and The Aristocats.

With The Wind Rises, which has earned an Academy Award nomination for best animated feature, Miyazaki has made a departure from the themes and visual language that have constituted the house style of his Studio Ghibli. The digression feels all the more startling in that the 73-year-old film-maker has announced that this will be his last film. The story of second world war fighter plane designer Jiro Horikoshi may be highly fictionalised and suffused with Miyazaki's characteristic sensitivity and breathtaking vistas, but it feels more earthily literal than the director's standard family-friendly fare.

With that caveat in mind, it's possible to admire and even enjoy the world that Miyazaki invites viewers to enter, in this case Japan during the 1920s and 30s, when the nearsighted, aeroplane-obsessed Horikoshi, unable to become a pilot, instead turns to engineering the flying machines that course through his dreams like giant, enchanted birds. He also dreams of an Italian aeronautical designer named Caproni, who appears throughout The Wind Rises like a benevolent muse. Miyazaki uses Horikoshi's life to illuminate some of the most distressing chapters of Japanese history, including the country's crippling economic depression, the devastating Great Kanto Earthquake of 1923 and a tuberculosis epidemic that, in the film, winds up playing a role in Horikoshi's courtship of his wife, Nahoko.

There are no fanciful creatures in The Wind Rises and, with the exception of a few nods toward Japan's animist tradition, few instances of Miyazaki's taste for the supernatural. But the movie still possesses the filmmaker's characteristic sense of wonderment, as Horikoshi embraces his vocation with studious devotion: he can find as much inspiration in a mackerel bone or waking dream as he can in a blueprint or slide rule.

Hayao Miyazaki at the Venice Film Festival in 2008. Photograph: Max Rossi/REUTERS

Younger viewers may not be so transported as the protagonist by talk of flush rivets, aluminium flanges and retracting undercarriages, but Miyazaki manages to cast a mesmerising spell over even those quotidian objects, capturing and conveying Horikoshi's own passion for industrial design, as well as his dawning dread as to their end use – in his case, as the notorious Zero planes flown by kamikaze pilots during the war. (The fact that Horikoshi's inventions played such a deadly role in Japan's military effort has led some observers to accuse the film-maker of glorifying, or at least glossing over, Japan's war machine.)

Although the thoughtful, pacifistic designer clearly harbours misgivings that what he regards as morally neutral work will end in destruction, the most eloquent voice of doom in The Wind Rises belongs to Werner Herzog, who voices a mysterious German whom Horikoshi encounters. Herzog's eerie cadences fit perfectly with his Cassandra-like character, just as it's fitting that the rest of the characters aren't nearly as recognisable. (Horikoshi is voiced by Joseph Gordon-Levitt, Nahoko by Emily Blunt and Caproni by Stanley Tucci.)

Visually, The Wind Rises is a thing of sensual, contemplative poetry, from the pearlescent cloudscapes and verdant countryside of Horikoshi's youth to the hulking grey factories he visits in prewar Germany as a young man. Of Miyazaki's many gifts as a film-maker, perhaps the most subtle is the way he honours time and silence and stillness, values that are in lamentably short supply in most modern-day productions. The Wind Rises possesses an almost courtly sense of innocence, even as Horikoshi's purity of purpose gives way to historical forces outside his control, and beautiful dreams give way to nightmares.

This article appeared in Guardian Weekly, which incorporates material from the Washington Post