After about 50 attempts (always solo) I managed to kill it. I still have no idea how to avoid its snake strangling attack, the one where you're close to it and its tail strangles you followed by a head sting and a push away (I play Nioh 2 in Movie mode, but expect this to be in Action mode too. I think it's described as: 'Yatsu-no-Kami will slams its whole body on the ground' above).
I don't understand what Team Ninja were thinking with this boss. It's sort of an interesting boss fight, but it takes way too many attempts to figure out, and the boss obviously has too much health.
After this boss fight the Onmyo novice training unlocks in the dojo, and if you've played your Onmyo points right, you can prepare 4-5 Sloth talismans for the next mission. You'll need it, because they throw in the clearly most difficult enemy from Nioh 1, Raven Tengu, there.