This is not technically a festival, but many shopping malls and buildings start big winter sale in the first week of January.
Buying Fukubukuro, lucky bags, is a huge event in Japan for New Year holidays. Some people are so crazy about Fukubukuro that they start lining up from middle of the night to get the Fukubukuro they want. Every year, Starbucks and Apple Fukubukuro is so popular that it instantly become sold out. Might be a fun experience to participate in this craze to shop in New Year holidays :)
Many New Year events are going around at many places, but because early January overlaps with Oshougatsu, the New Year, so there are not many festivals.
Until 3rd January, many people gather at shrines and temples that are famous for Hatsumode, the first visit to shrines/temples, so it feels like it's a festival.
I did some research and found out that "DAIHANNYA-KOU DAIKON" festival is held at MATSUCHI YAMA SHOUDEN near Asakusa on 7th January. (I could not find the official information about the date in 2017, and definite information that the festival is going to be held in 2017.)
This shrine sacrifice Daikon radish to gods. The shrine seems to give away Daikon radish to first 200 people.
Many winter festivals in Hokkaido starts from the end of January. Here are few events in Hokkaido
- Penguin walk in Asahikawa
The famous event of the popular zoo in Asahikawa, Asahiyama Zoo. Penguins go for a walk in the zoo, they are so cute!
Most of the places leave christmas lights until the end of February or early March:
Sapporo, Hakodate, Shirokane Onsen, Niseko, etc.
This is not exactly festival, but the famous Blue Pond in Biei will be lighten up at night during winter:
I went there 2 years ago and was pretty cool.
Watching the first sunrise, "Hatsu Hi No De" is an important event like festival to Japanese. Watching Hatsu Hi No De from Erimo Cape is a popular thing to participate to people in Hokkaido.
Also, ice floe start to come to Hokkaido from January. If you are lucky, you will be able to encounter the ice floe at Okhotsk. http://www.garinko.com/
Wakasagi-tsuri, Japanese pond smelt fishing in Abashiri is a fun activity, too. Starts from 5th January.