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Iwao is murdered by Lan Di who comes seeking the Dragon Mirror. He is prepared to die before revealing its location, but Lan Di threatens to kill his son, and he relents. After Lan Di recovers the mirror from beneath the cherry blossom tree and departs, Iwao dies of internal bleeding from his injuries. His last words to Ryo are "Keep friends... those you love... close to you." Iwao was the leading proponent of Hazuki-style jujitsu, and prior to his death, had taught both Ryo and Masayuki Fukuhara, a live-in student at the Hazuki residence. Flashbacks show Iwao to be a strict teacher, but also a loving and nurturing father. Dialog between Ryo and various characters in the area show that Iwao was a highly respected local figure and that many mourned his death.

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