Witnesses recounted seeing victims, including children, screaming as they rolled around on the ground to try to extinguish the flames, while the thousands who had gathered for the Thursday night festival fled in panic.
The explosion is believed to have erupted at one of hundreds of concession stands lining a nearby riverbank at the festival, which is held annually outside the ancient capital of Kyoto and attracts upwards of 100,000 people.
Video footage showed the stalls, which had been selling drinks and snacks, going up in flames and sending smoke into the night sky, before a larger blast erupted.
Early accounts said the incident was believed to have been caused by a gas cylinder, but Jiji Press news agency said police suspect the fire may have started when a vendor added gasoline to a running power generator.
"I heard a bang and then saw a billow of smoke," one 37-year-old man, who had been volunteering near the site, told Kyodo news agency.
Pictures from the scene showed charred concession booths and an abandoned baby stroller among the picnic blankets and clothing left behind after the crowd fled in the aftermath of the blast.
Of the 59 injured, at least 19 people suffered major burns and other serious injuries, according to police. One 10-year-old boy remained in intensive care Friday.
"I heard a boy crying, 'atsui, atsui (hot, hot)'," one middle-aged man told Nippon Television from the scene Friday morning.
"People gathered ice cubes from wherever they could and used them to cool peoples' burns," he added.
The fireworks display was cancelled after the incident. It was unclear how many spectators were in the immediate vicinity of the festival, which was held in Fukuchiyama city, about 70 kilometres (45 miles) north of Kyoto.
A 27-year-old male witness told the top-selling daily Yomiuri Shimbun that he saw the fire start near a jerry can sitting next to a generator at the back of a concession stand.
When a man, who appeared to be the vendor, opened the can's lid, a hissing noise was heard just before a fire started, the Yomiuri said.
"We'll have to see the results of our on-site investigation to determine the cause of the fire," a local police officer told AFP Friday.
The police force's serious crimes division was taking part in the joint investigation with firefighters as they probe the possibility of negligence resulting in the accident, he added.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ