I’d recommend you avoid travel between August 11 and 15, then.

This year Obon is on August 13. Personally, I don’t think it’s that bad to travel at that time, a lot of people stay in their local neighborhoods. The time to avoid is “Golden Week” which is from April 29 through May 5 this year. It’s basically a national holiday week when everyone has vacationing plans.

I wholeheartedly agree with lokialokia… though it really depends on where you’re hoping to visit. Obon usually (less so, in recent times) is a time for people to return to their home towns, many of which aren’t the bustling areas to which foreigners are likely to travel.
Golden Week is much more of a series of days off than a spiritual thing… that’d definitely be the time to avoid. Everyone goes shopping all the time here in Japan (obviously a hyperbolic statement, but from living in Tokyo and Kyoto, I guess I have a limited amount and kind of experience), basically multiply that by 100 plus some.

If I were a foreigner coming to Japan for a short time, I would definitely want to see Obon- either that or Kyoto’s fabulous momiji and shrines… ^^

(PS: Unfortunately, I was armed only with a camera phone during a day’s worth of shrines and whatnot… but you get the idea.)

I agree with the answers so far: Golden Week is worse, but Obon should be 11-15 August 2007 or so. You’re perhaps aware, but even during this period, if you’re not using either the highways (where you get traffic queues 10s of km long every year) or the bullet train then it’s not too bad. Tokyo isn’t a bad place to be in Obon because everyone leaves. It’s like Thanksgiving—most people only travel domestically, and most are heading to home towns.

I also back up Lokialokia…Golden Week is the big week here in Japan..although I am working during that time so I miss most of the travelling and the corwds anyway:)
Obon is in August and most Japanese families do tend to stay pretty local so you shouldn`t have a big problem travelling during that time.
Hope that helps a little bit

Mike

Obon is usually falls mid-august. It’s always hard to travel in Japan during the summer because of the heat and humidity and the insects. But if you do make it out, I would recommend the obon festival in Kyoto – they light up the whole side of the mountain for daimonji.

info about OBON

http://www.japan-guide.com/e/e2286.html