The photo looks like a painting.
Take a look at the number of bizarre creatures on the List of legendary creatures from Japan.
Here is the potential reason why the Japan authorities would want to invent a flying squid to ally peoples fears if they saw something that looked like a ghost perhaps:
Japan's post-disaster reconstruction efforts hindered – by ghosts
Reconstruction and repair have been put on hold in some instances due to workers' fears that the spirits of the dead who passed away a year ago will bring them bad luck if they continue, according to AFP.
Highlighting one half-repaired supermarket, local Satoshi Abe, 64, told the agency: "I heard people working to repair the store became sick because of ghosts. People died here everywhere, here and there. The city is full of such stories."