The most common and most likely answer to this crossword clue is the 5 letter word MERRY
I've seen this crossword clue in Financial Times
M
E
R
R
Y
Buddy explains!

The straight part
We know that "Happy" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case happy = merry.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MERRY mean?
MERRY adjective- Jolly and full of high spirits.
- Festive and full of fun and laughter.
- Brisk
- Causing laughter, mirth, gladness, or delight.
- Drunk; tipsy
- An English wild cherry.