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Im not sure. To be completely honest it bugs me a little when i hear it, similar probably to how it may bug somebody when called a nigger. The word nigger was originally used in neutral context, and was simply based on the latin word for black, niger. Over the years it adopted a negative or condescending association. Same with Jap, it was just shortened for convenience but it may bother some people. Personally i won't use it unless one day my laziness outweighs my decency or respect for another person.
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