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The onsen consists of our ryokan surrounded by old growth forest are located along the Ohatagawa river within the Shimokita Hanto Quasi-National Park. The area includes a nationally-run campground called 'Kokusetsu Yagen Yaeijo'.
Oku-yagen Hot Spring is located 2 km upriver and an outdoor bath (露天風呂 rotenburo?) called 'Kappa-no-yu' . The outdoor baths 'Oku-yagen Onsen Rest House' and 'Fufu-kappa-no-yu' (Wedded Kappa Bath) are run by the municipality and are both located along the riverside.
The onsen was discovered in 1615 by an ally of Hideyori Toyotomi, who retreated here after the defeat of the Toyotomi forces at the summer siege of Osaka Castle. The onsen was named after a tool used in the making of traditional herbal medicine, which it resembled.
Oku-yagen Onsen claims an even older history. In 862, Jikaku Daishi, who discovered Osorezan, suffered a great injury after he got lost. The story is that he was saved by a kappa (water imp) who immersed him in the waters of the 'Kappa-no-yu' bath, thereby healing his injury.
Yagen_Valley travel guide from Wikivoyage