"O bon" is a buddhist memorial service for the ancestors and deceased members of families.
It is an event to receive and comfort and honour ancestral spirits.
The formal name is Urabon-e.
It takes place in July from the 13th to 16th or August the 12th to 17th.
It depends on lunar calendar and location where you are in Japan.
During this period, spirits of the dead are believed to return home families.
In the area I know, people lit fires on August 13th to guide ancestors and deceased family members to their home.
They also lite lantern inside the house to help them to find their way.
In most places, Bon stand are display and some offerings are display.
At home, Butsudan (buddhist altars) are set up and offerings are made out of vegetable and fruits and are displayed for ancestors spirits.
People visit the family's grave, clean it, offers flowers, burn incense stick and pray for their souls to rest in peace.
Here is the manners when you go visiting a grave in Japan:
Pour water onto the gravestone, clean it with sponge (or other) and wipe off the waper.
Also clean the flower vase stand and water bbasin if you have one.
After, put flowers in the flower stands, light candle and a bundle of incense sticks and place them in to incense burner.
If you have brought offerings, you please place them on a sheet of Japanese paper.
Once the grave have been cleaned and all apparels
They squats down facing the front of the gravestone, and take your "Juzu" in hands and prays quietly joining one hands together.
Bon dances "O bon dori" are performed to entertain ancestral spirits throughout Japan.
On the last evening of "O bon", farewell fires are made to guide the spirits back to their world.
You see more of the floating lanterns in the country sides.