You may be familiar with cute kokeshi dolls of kimono-clad girls, like these,
but traditional kokeshi come in all sorts of shapes and sizes.
The one above is a kappa, or japanese water sprite. Kappa are believed to be mischievous, and sometimes dangerous.
The blue circle on the top of his head represents a kind of puddle of water, which the kappa must keep on his head, whenever he is away from water. If the water spills out of it, he is unable to move.
If you are unlucky enough to meet a kappa, give him a deep bow. As kappa are very polite, he will return the bow, thereby spilling the water from his head. He will be unable to move until the water is refilled!