The Yokai realm is an area that surrounds hostile, demonic creatures. It can be easily distinguished from the surface, as it consists of dark, wavy circles around the enemy. When a demon changes its position, the Yokai realm area will remain at its primary position and then it will disappear. There can be several places like that at the same time on the battlefield.
When you move into the Yokai realm our Ki will regenerate at a much slower rate and your enemies will become more powerful. Furthermore, the energy bar will be covered in a red frame. When fighting demons, one should drag them away from the Yakoi realm, as the battle can cause a lot of trouble.