This hand towel is called a "tenugui". A Tenugui (手拭い) is a thin Japanese hand towel made of cotton. It is typically plain woven and is almost always dyed with some pattern. It can be used for anything a towel could be used for - as a washcloth, dishcloth, but often as a headband, souvenir or decoration. Towels made from terry cloth have replaced many of its use in the household. However tenugui are still popular as souvenirs, decorations, and as a head covering in kendo, where it functions as a sweatband, as extra padding beneath the headgear (men), and to identify the participants by team color.
It is 35 cm x 87 cm (approx 34 x 13 inches) and is 100% cotton.
http://www.ebay.com/itm/Japanese-Hand-Towel-Traditional-Tenugui-100-Cotton-Cherry-Blossoms-Pastels-T12-/132197641528