Tokyo Bay is only used in games with five (5) or six (6) players. In these games there can be two monsters in Tokyo at a time.
Note, that as soon as the number of players drops to four (4) or less, Tokyo Bay is no longer in play. If there is a monster in Tokyo Bay when this happens, then the monster in Tokyo Bay must be moved immediately; to Tokyo City if it's unoccupied, or off the game board the city if Tokyo City is occupied.