There's a lot of really chilled understated hip-hop out there. I'd dispute it being 'folk' as such (no more than I'd call any other pop music genre Folk - apart from Folk that is!) though Japan's Dragon Ash certainly weave in some acoustic-folky textures which aid the reflective nature of their joints. Try this for starters:

http://www.youtube.com/watch?v=q4-2vml9I9E

In translation:

Grass and trees become green, flowers colorfully bloom.
Seasons come by again. A comfortable spring day,
With out anything to do I think by myself
in the tree lined street.
The days go by without any break.
I am struggling to manage myself here.
Sometimes, let's live a life
Without thinking so deeply.
Morning comes, the sun rises again.
Outside the window the south wind
blows the pain in my heart.
Shall the tears I shed in the past days
be pulled into my unconsciousness.
what is important is the light,
I'd like to stay here a bit more.

WE GO EVERY DAY, let's go with laughter
To the direction of the shining light
heading into the open future ahead.
WE GO EVERY DAY, let's go with laughter
Like pouring water into a vase
my wishes please be granted.