I assume that "The Tale of the Bamboo Cutter" (also called "Princess Kaguya") is a familiar story to many Japanese people. Here in the States, we have, for the most part, never heard of it. Because of this, I am not sure how it compares to other versions of this story. All I know is that I really enjoyed this film with a modern slant.
The original story was written sometime around the 10th century (at least that's what Wikipedia says) though at the end of the film it says it's set around 790AD. Regardless, it's a very fanciful tale that has been updated a bit to suit modern sensibilities. The film begins with a wood cutter (Toshiro Mifune) finding a baby when he's out in the bamboo forest visiting his daughter's grave. However, this is no ordinary baby--it grows VERY fast and is an outer space baby!! And, more importantly, it looks like his dead daughter but with weird blue eyes (in the original story, she had hair that shone like the moon). She soon grows up--at a highly accelerated rate. And, she's so beautiful that all the men seem to want her--even the Emperor! However, she rebuffs all their advances and sends the suitors off on impossibly crazy tasks--and you assume it's just to get them out of her hair! Later, the film becomes a LOT like "Close Encounters of the Third Kind", as her actual people from the Moon are coming back to claim her. This is because given modern sensibilities and special effects, the ship looks a lot like those from Spielberg films--such as "Close Encounters" or "E.T."! It's all the more amazing because the story was written so long ago.
The story is very beautifully filmed, acted and the story is pretty exciting. The only negative is that, inexplicably, the film's credits roll with a song from Peter Cetera (from "Chicago")--music that seems odd given that it's a medieval story! However, this is a very minor quibble and the story is lovely from start to finish.