Butterhead is a slur used to describe Japanese in a derogatory way. Used by U.S. Marines in the Pacific Theater of WWII, and some survivors of it to this day. Refers to yellow skin tone of Japanese soldiers. Expression appears in some U.S. movies made during the war.
The word Butterhead is a racial slur that has been used historically to degrade and dehumanize japanese. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to japanese. If you are unsure about whether or not it is appropriate to use the word Butterhead, it is best to err on the side of caution and avoid using it in any situation.