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The annual Kanamara Matsuri (Festival of the Steel Phallus) takes place every spring in Kawasaki, Japan. One travel site explains:
Created back in Japan’s Edo period (1603-1867) to pray for sexual safety (especially against syphilis) among Kawasaki’s prostitutes, this Shinto gathering now helps raise money for HIV/AIDS research. But the festival attracts more than just those interested in fighting STDs; it also draws Japanese couples looking for good fertility luck, a large gay/lesbian crowd, lots of proud locals, and scores of interested foreigners who come to gawk at the gigantic portable plaster phallus shrine and buy souvenir John Thomas lollypops and charms.

This Kanamara Matsuri page (photos) from Hideous Japan gives a different account of the festival's origins:
The festival celebrates the vanquishing of a demon that lived in a woman's vagina and would bite off the penises of her lovers! According to legend, a local craftsman fashioned a steel phallus which broke the demon's teeth.
From another good travel article (photos):
Today, the highlights of this saucy festival include transvestites parading through the town's streets carrying a mikoshi (portable shrine) with a humungous pink phallus on top. . . . Other attractions include locals carving penises out of daikon (radish), children and young women sitting astride penis-shaped seesaws for good luck and fertility blessings, as well as a seated banquet in the compound of Kanamara Jinja (aka Wakamiya Hachiman-gu shrine) where the phallic radishes are auctioned.
Or as this account in delightful Engrish (photos) puts it:
"Elizabeth MIKOSHI" which is conspicuous in the pink is shouldered only by new half type woman (?) and the woman wrapping person. Wow!
More photos here and here and here. This year's Kanamara festival will take place the weekend of April 5-6. (Awareness sparked by and some links snagged from Geisha asobi.)
William Dean looks at spring fertility festivals in various cultures and eras: the Kanamara festival in Japan, the Fastnacht in Switzerland, the Lupercalias of ancient Rome, the May Pole dance and more. Good selection of sidebar links. (Apr 2003)