This history of knitting in Japan is minimally documented. KnitJapan has a great article on the interesting history, with wonderful images and dates.
To get a bit of a better understanding of Japanese knitting patterns, tata-tatao has a explanation to your confusion.
Here are some tips on Japanese knitting techniques. Japanese short rows are explained here.
Fulfill your Japanese knitting fantasies, and add to your knitting library with these Japanese Knitting Books
Dying to see photos of the "knitting prince"? Feast your little eyes on this!
Oh, you must visit this blog. It takes you into Japan like no other, with a sincere couple as your guides. (I'm sure there are other great blogs out there, but I enjoy this one.)
Last, but certianly not least, see some cute little otamas, here and here.