Today is Halloween, the time of year in which little (and not so little) children dress up in various costumes and go trick or treating (go to houses with lights on and are given candy). Most people reading this know about Halloween since it is an international holiday and even if it is not celebrated in your country, you likely know something about it from American popular culture - things like Halloween movies and Simpson's specials.
The Japanese have a tendency to adopt anything that they find interesting, cool, or fun into their culture. Even though Halloween is of Celtic origin and the average Japanese person likely does not know the origins of Halloween; Halloween and many of its traditions have been adopted into Japanese society. Adding Halloween to their culture was a very easy transition since many aspects of Halloween already existed in Japanese society.
I have seen it mentioned that O-bon is Japan’s Halloween. It is not, though there are a few similarities; both days are about spirits is one such similarity. O-bon is, in my opinion, closer to All Souls Day or Día de los Muertos (the Mexican day of the dead) than Halloween.
Pumpkins have become a symbol of fall and of Halloween. The Japanese really like pumpkins and make many foods with pumpkin. Here is a link to some: Japanese pumpkin recipes. There are many foods that have been made in pumpkin flavor, for example, they sell pumpkin flavored kitkat bars in Japan.
A traditional thing to do on Halloween is to go to a haunted house or scare people. This is, and has been, a part of Japanese culture for a long time. The Japanese have a game, very similar to haunted houses called Kimodameshi which I wrote about earlier and can be read here: Kimodameshi.
Trick-or-treating is not something that existed in Japanese culture but has been taken up by the Japanese. In Japan, trick-or-treating is not usually house-to-house. Instead schools, hotels, apartment complexes, after school activity centers, libraries and restaurants hand out candy and small gifts (things like cards, oranges, and small toys).
The Japanese have many ghost stories and legends with monsters. They also make a lot of horror films. I really like a lot of Japanese horror films, though the most famous in the USA is probably the Ring, which was an alright film but I wouldn’t rate it as one of the best. A common ghost story, with several variations and movies, told at just about every school in Japan is Hanako of the toilet. The story goes like this: In the lavatory at the third stall you call Hanako and she will show up and say “yes” and then ask you what we should play. In some variations she is nice and wants to play, sometimes she just wants to scare people, and sometimes she kills people. This story is similar to the US story of Bloody Mary in which you stand in front of a mirror saying Bloody Mary, Bloody Mary, Bloody Mary, in that both summon a spirit by calling it's name.
On Halloween there are Halloween festivals and parades in which a large number of people go in costumes with various rewards for best costume (A Halloween parade can be can be seen in Your Under Arrest Anime). Many Japanese people like to dress up in costumes, even when it isn’t Halloween. Halloween just gives them another reason to do so. The Japanese cosplay (Costume Play) quite a bit. Cosplay can be seen at public events such as video game shows, cosplay parties at nightclubs or amusement parks. Some Japanese teenagers gather in places like Tokyo's Harajuku district to engage in cosplay. The Akihabara district has a large number of cosplay cafés, catering to devoted anime and cosplay fans. The waitresses at such cafés dress as game or anime characters; maid (or meido) costumes are particularly popular.
Japanese businesses like Halloween; that is not really surprising though since most businesses will use any excuse to sell stuff. Pastry shops sell various pastries in Halloween shapes like bats, Toy shops sell teddy bears dressed as pumpkins, etc…