Obon (お盆, Bon Festival) is a Festival in Japan that takes place on August 15th or 16th (Date Varies). Obon is the day Japanese people pay respects to their ancestors in japan. There will be many festivals in the streets of Japan, with huge parades.
In Animal Crossing New Leaf, Isabelle will be waiting for you at the Plaza wearing a Yukata (Summer Kimono). Once you talk to her she'll give you either a Cucumber Horse (きゅうりのうま) or a Eggplant Cow (なすびのうし). There will also be a Face-Cutout Board that Shows the player wearing a Blue Yukata (Summer Kimono) while holding a light blue fan. It also shows fireworks and a Cucumber Horse and an Eggplant Cow next to the player.