Obon is the celebration of the deads in the family. Depending on the regions, it is celebrated in july or August but mostly on 14th and 15th August.
This is not a bank holiday but many companies give days off to the employees. This is a time when Tokyo becomes very quiet, this is very enjoyable.
People go back to their families and celebrate the memories of the dead family members. They go to the temple and dance Bon-Odori. I was lucky, I have a temple close to my place where local people gathered.
In the center of the square, was set up a Yagura, a quiet high wooden stage, where the drummers would stand up successively. Dancers in the middle would show the way and public would copy around.
Then, there is a variety of shops for street food around that you can enjoy, yakitori, beer, etc.