Why do shrines in Japan hang these white strips of cloth?

This is called a "gohei" (ごへい), which is an object in Japanese Shintoism that is hung to indicate that the area is sacred.

First, it was used as a tribute to the gods. In ancient Shintoism, some gods liked wine, so the tribute was wine; some gods liked cloth, so the tribute was cloth; and some gods liked paper, so the tribute was paper. ---- This is the origin of the "gohei," which has evolved into the shape of the "gohei," which is called "gohei," and is used to represent the area that is sacred. The material may be paper or cloth or hemp, etc.).

The places where the "coins" were hung represented the areas of the gods, and people (or other demons) had to be honest when they entered them.