Thoughts? 

This is not a prayer flag.  It is a standard Japanese national flag.

Is it WW2 vintage?

Looks like it.

National Holidays in Japan are also called "Flag Days", because people used to put up these flags in front of their homes on those days.

One thing you can do is to check whether the white cotton (?) glows in blacklight, indicating use of "Blankophor" fluorescent whitening agents developed by IG Farben in 1940, which only saw widespread use in the postwar years. If it glows, it is definitely post war. If it doesn't glow, it has a chance of being earlier, but could still be an untreated post-war product.

Material-wise they tried to persuade people to be patriotic and buy silk flags during WW2, Credit: "NK" War Relics Forum

@GAP What is the material: silk or cotton? 🤔

Silk