Deluxe Ochaken Ho~nwari (でらっくすお茶犬ほ~んわり) is an interactive toy from Sega Toys, based on Ryoku and Hana from the Ochaken franchise.
It apparently retailed for 5,229 yen (4980 yen without tax), requires three AA batteries, and comes with a tea-scented sachet (I'm guessing you place this in the dog?). It seems to have been released in 2002, since the website announced it in November that year.
It responds to being spoken to, and apparently the way in which it responds depends on the length of the words you use? Pet its head or back, and it will sniff, flap its ears, and blink its eyes in response. If you pet its back alot, it could fall asleep.
Two images in the "Functions" section also were from the official website.