The Bon Dance festival or "Day of the Dead" is a Japanese Buddhist event in which people honour the spirits of their ancestors. Many Japanese travel to their family home during this time and party the night away performing traditional dances in yukatas or, in some cases, shorts and luminous mouse ears (hey, I'm just telling what I saw!).
Tradition has it that during this time, the spirits of the deceased return to earth and lanterns are lit to help guide their way back to the family shrines. Having said that, the Japanese I spoke to seemed somewhat vague on the details and more focussed on the food and dancing.
The festivities last for several nights, but at the festival I attended in Gujo-Hachiman, only over the weekend did the dancing continue until 5 am, on other nights that week it stopped at 11 pm (for I imagine, fairly obvious reasons). The dances are performed in the street in what would be a circle, but is more oval due to the restrictions of the road. I confess to being a hopeless dancer, but the steps were simple and repetitive and even I got the hang on most of them in the end. Stalls similar to those you'd find in a fair ground sold toffee (caramel) apples and toffee grapes (!), fish on a stick (top right photo, I knew you wouldn't believe me) and takoyaki or grilled octopus (very yummy - trust me).
For this event, a friend's mother helped me with my yukata and the tying of my obi. An efficient Japanese woman, it was quite some time after we had arrived home that I was able to extract myself from its embrace.