Which nation traditionally uses straw decorations for christmas?

I believe the answer is Sweden.

Actually, using straws as christmast decoration is widely popular in Scandinavian nations.

The popularity of these ornaments started to influence other nations and using straw as basic material started to spread in other nations such as Germany and Bavaria

it is a Swedish custom to make straw decorations. A common tradition is to craft a "Holiday goat" made of straw and other festive decorations to place around the house or on the tree. Decorations are small and inexpensive.