"The cartoon was made during World War II, and reflects the United States' attitude towards one of its main enemies at the time, the Empire of Japan. In the cartoon, Bugs Bunny lands on an island in the Pacific and is pitted against a group of highly racially-stereotyped Japanese soldiers.
"Bugs shows no mercy against the Japanese soldiers, greeting them with several racial slurs such as "monkey face" and "slant eyes", making short work of a large sumo wrestler, and bombing most of the Japanese army using various explosives, including grenades hidden in ice cream bars. The cartoon's title is a play on the verb "nip" as in "bite" and "Nip", a then-widely used slur for Japanese people, based on the fact that the Japanese word for "Japan" is "Nippon." - Wikipedia: Bugs Bunny Nips the Nips. Original footage here.
One of The Censored Eleven.