Gaijin
From WikiJET, the interactive website for the JET Programme
Gaijin (外人?) Literally meaning "outside person", is used to refer to all foreigners in Japan, whether resident or visiting. Some people consider it to be a pejorative term, best rendered as "outsider" or "alien". The more correct and polite term is Gaikokujin (外国人?) or "outside country person", while adding a -san or -sama immediately afterwards increases its level of politeness. In many ways this term has been appropriated by foreigners who often use it to describe themselves and their non-Japanese friends. Its usage is so widespread that it has been acknowledged as an English word since 1964. It is interesting to note that despite its meaning, a Japanese person will never consider themself to be a gaijin, even when in a foreign country.
Debito Arudou has proposed other terms as replacements, including takokujin (他国人?) (other-country person), nihon kokuseki de wa nai kata (日本国籍ではない方?) (non-Japanese national), nihonjin de wa nai kata (日本人ではない方?) (non-Japanese person), which he claims imply difference without the pejorative connotations of "gaijin" or "gaikokujin".
