“Character culture” – the possession, appropriation and representation of media-related or licensed characters – has been a unique socio-cultural phenomenon in Japan (Miyashita 2001). These characters have been acknowledged, among both adults and children, both as identity markers for individuals and as a form of social, cultural, economic and relational currency (Kayama 2001). This paper explores how preschool children aged 3-5 years old construct their sense of belonging in their peer culture in Japan through character goods and knowledge. Drawing on fieldwork in two preschools in Japan, I discuss that possessing and knowing about popular commercialised products take an influential role in peer culture, which inevitably affects children’s ‘economy of dignity’, their sense of belonging (Pugh 2009). The findings of the study suggest that young children establish and manage their public self-image in order to allow a sense of connectedness among peers, and that in their efforts to feel being worthy to others, they constantly and creatively shape and reshape the meanings and values of those commercialised character goods and knowledge.