don't get me wrong, i'm not easily offended. and i'm not a person who looks for things to be offended by. in fact i hate it when people do that.
i knew an aussie would chime in on this too! different countries use the term differently. especially the english speaking coutries that fought japan in WWII.
JAP in all caps is an abbreviation in reference to the country in monetary usage or stocks, but 'jap' IS considered racist.
from wikipedia:
'Jap is an English abbreviation of the word "Japanese." Today it is regarded as an ethnic slur, though English-speaking countries differ in the degree they consider the term offensive. In the United States, Japanese Americans have come to find the term controversial or offensive, even when used as an abbreviation.[1] In the past, Jap was not considered primarily offensive; however, after the events of World War II, the term became derogatory.'
in the usa it is almost always used in a negative way. if someone called my girlfriend in college a 'jap' i would not take it in stride. them's fightin' words. and no, she wasn't a jewish american princess (another useage of the term 'jap')!
and quite frankly to defend its usage shows ignorance on the subject. it's like saying 'spic' is short for hispanic and is ok. it's not. 'nuff said.