This is a continuation of the introduction to Miraculous Stories from the Japanese Buddhist Tradition.
From Kyoko Motomochi Nakamura preface:
Kyōkai’s Source Material
Kyōkai used as his sources not only the oral tradition of his time but also written traditions both Japanese and foreign. According to Uematsu, nearly 90 percent of the stories had been handed down by monks or local people before they reached Kyōkai. He was by no means a creative writer, but rather an editor and commentator on the tradition he worked so faithfully to document. Although isolated legends had existed for several centuries, Japanese legendary literature was not born until a special set of conditions came into existence. It is clear that the corpus of Buddhist legends that had originated in India, developed in China, and been transmitted to Japan greatly stimulated and influenced the development of indigenous Japanese legends. (page 42)
Nihon ryōiki value
It is evident that later works surpass the Nihon ryōiki in literary refinement, historicity, and depth of introspection. However, the merit of the Nihon ryōiki lies in its simple affirmation of faith and its diversity of interests and views. Though no one would deny the influence of Chinese tradition, the Nihon ryōiki is, nonetheless, Japanese in the sense that it was not only accepted by the people at the time of its compilation but also helped to shape the later Japanese tradition. (Page 44)