Japanese folklore is an amalgamation of different traditions, with a foundation in the folk religions of isolated tribes living on the Japanese isles. These traditions were modified by Shinto and later Buddhism, incorporating elements from Chinese and Indian folklore as well.
The oldest recorded histories of Japan go back to the 8th century and contain the creation myths and legendary prehistory of Japan. Various documents catalogue these legends and folklore from different perspectives, and contain the earliest records of the gods, demons, and other supernatural creatures of Japanese folklore.
During the Edo period (1603-1868), there was an unprecedented flourishing of culture and art in Japan. Ghost stories and stories about monsters and strange phenomena from the all over Japan experienced a huge surge in popularity. The very first mythical bestiaries were put together by folklorists and artists like Toriyama Sekien, who collected the oral traditions of rural Japan for consumption by the growing urban population (and added a few original monsters into the mix). These begun as collections of painted scrolls, and later expanded into multi-volume illustrated encyclopedias of strange tales and supernatural stories. Toriyama’s The Illustrated Night Parade of One Hundred Demons set the stage for other artists, and the yokai tradition was born. It quickly expanded into every aspect of Japanese culture, from fine art to high theater, from aristocratic ghost story-telling parties to low class bawdlery, and so on.
Yokai fell out of popularity during the Meiji restoration, when Japan rapidly modernized its society and culture. They were all but abandoned as a relic of a superstitious and embarrassing past. After World War II, manga artist Shigeru Mizuki rediscovered their charm and re-introducted them to a modern Japan. His comic series GeGeGe no Kitaro caused a second explosion of interest in the supernatural. Today, the influence of yokai can again be seen in all aspects of Japanese culture, from manga and anime, to video games, brand labels, and even on Japanese currency.