The Lausanne 2020 Winter Youth Olympic Games champion, skating to music from the Avatar soundtrack, nailed a sublime skate, with his only error popping a triple loop down to a single.
It was, by far, the best skate of the 10 athletes in the free program (188.61), outscoring the second-placed free skater Miura Kao by some 45 points. Kagiyama scored over 105 points in technical elements alone.
The 17-year-old opened with beautiful quadruple jumps – a Salchow, followed by a toeloop in combination with a triple of the same jump – and also landed a clean quad toe later in his skate.
The quadruple Salchow scored an impressive 4.07 from the judges on figure skating's -5/+5 grade of execution scale.
Kagiyama's triple Axel-single Euler-triple Salchow combination, and later triple Axel, were also outstanding.
His total score of 275.87 points was nearly 50 points more than Tomono Kazuki, the silver medallist (226.62). Honda Lucas Tsuyoshi won bronze (217.56).
"It hasn't sunk in yet," he told media. "I wasn't worried about the score; I wanted to focus on the performance. I was close to being completely mistake-free so I'm happy with the outcome.
"I played it too safe yesterday so I was set on being aggressive all the way through, even if I fell. My dad (also his coach, Masakazu) told me before the skate to always be a challenger and that's what I tried to be.
"I'm not thinking too far ahead or about my future at the moment. I need to turn my sights to the nationals."
Before Kagiyama took the ice, a succession of skaters struggled with getting their jumps away cleanly.
Tanaka Keiji, Honda, and Tomono all popped triple Axels down to singles – Tanaka popping three Axel attempts (one to a double, two to singles). While Tanaka, arguably the most experienced skater in the field, received strong performance scores, his technical elements let him down as he finished fourth.
Honda, crowned the Japanese junior national champion earlier this week, held on to his unexpected third place from the short program to win his first senior Grand Prix medal.
Although the youngster had no quad jumps in his routine and struggled with his Axel, the second half of his routine with three strong combinations ensured he stayed ahead of Tanaka.
Tomono, meanwhile, popped his planned opening quad toe down to a double and turned out of his landing to a quad Salchow. He also received deductions for an unclear edge on his triple Lutz, before he popped the Axel of his 3A-Euler-triple Salchow combination.
A tough skate was rounded off with a double flip-double toeloop combination, only for the double toe to be called invalid as he had already jumped it twice earlier in the routine.
"Watching Yuma today, it made me realise just how much work I have to do," he admitted.
"I think it's great what (the teenagers) are bringing to Japan, some really brilliant skaters. They are going to make Japanese men's figure skating more exciting and I tip my hat to them. I have so much I can learn from them.
"I'm seeing them rise right before my eyes. It doesn't matter what age you are. Their commitment to the craft is something I emulate and I hope I can catch up to them."