I think people first started doing it after the Vietnam war, and it was originally supposed to mean "victory." But then they changed it so that it'd mean "peace."

When I hosted exchange students they said they always were taught to use this sign as one of peace.

"V" sign? It represents 'peace' and is also common with koreans and chinese. :)

so they looked kawaii.

The Japanese learned from the American teenagers. I asked the American high school kids what is the symbol for that two fingers. The symbol of that two fingers means " peace and love". They counter claimed that they learned from the Japanese (animation). They think, it is cute.