Yukata are casual summer kimono made of cotton. They're inexpensive and easy to wear. There are yukata for women, children and men. Young women tend to wear brightly colored yukata with eye catching patterns. Older women wear darker colors and simple, elegant patterns.
Yukata are worn to spring and summer events and festivals (matsuri). Women are more likely to wear them. In fact, it's unusual to find a women who doesn't wear yukata to a summer matsuri.
(above photo is the Samba Carnival in Tokyo)
About half of men wear yukata to a summer matsuri. Men also wear other traditional garments such as fundoshi to some summer festivals.
Traditional shoes called geta are normally worn with yukata.
It's important to wrap the yukata so that the left side (from your perspective) is on top. Only the dead wrap the right side on top (e.g. at a funeral or wake).
Yukata should be worn tightly. They shouldn't be allowed to hang loose over the shoulders.
An obi (traditional sash) is used to secure a yukata. You can use the obi to hold objects such as a fan.
In old Japan, ladies of the pleasure district wore their bow in the front to indicate their occupation.
Yukata are often used as uniforms for traditional performers such as musicians and dancers in Japanese festivals.
People in Japan tend to be nostalgic about yukata. They remind everyone of summers past.
Yukata are often provided in Japanese hotel rooms and ryokan. At a ryokan it's usually okay to wear the yukata in public areas. Hotels may discourage guests from wearing yukata to dinner or in the lobby. It's usually okay to wear yukata to the hotel's onsen. Check the rules before wearing hotel yukata outside your room.
Hotel yukata are informal. They are tied with a belt rather than an obi.
If you attend a summer matsuri be sure to wear yukata. It will add greatly to your experience.