Actually that probably ISN'T caterpie, it's an actual Papilliodae caterpillar (though Cterpie was based on one) the humped shape and large eyespots give identify it as such.
(Puts on lecturer's labcoat and glasses, picks up pointer, and goes to blackboard)
Most caterpillars of butterflies in the Family Papilionidae (The Swallotails)are equipped with a two pronged yellow or orange organ called an osmeterium, which secretes a very unpleasant smell and which the caterpillar uses for its defense (when threatened they stick it out to repel whatever is attacking them,then retract it) Hence the "It stinks" comment. Thank you (puts down pointer takes of glasses, and sits down again.)
I can actually do one better; assuming the drawing was done in Japan (and hence uses a Japanese species) the caterpillar is that of the Great Mormon Butterfly, Papilio memnon (its the only one of the seven or eight common species of Japanese Swallowtails whose caterpillars have eyespots that big)