The photo was snapped in Tokyo's hipster neighborhood Harajuku. I haven't seen anyone dressed like this in Japan (and most people online in Japan also seemed surprised).
The photo is making the internet rounds with some people saying this get-up looks cool. The guy might even be wearing a hug pillow! The look is interesting, that's for sure. And you definitely need to be confident to step outside in something like that and make it work.
Update: As sister site Kotaku Japan pointed out, Japanese art student, Kota Okuda, appeared in this photo. It was, however, taken in London and not Harajuku. More here.
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今原宿で流行ってるらしい [2ch]