“By 1874, when their numbers reached 520, the combined salaries of the foreign experts [brought in by the Meiji government to modernize Japan] accounted for roughly one-third of Japan’s annual budget” (Getting Wet pg 110)
Despite the widespread impression that 外人 (gaijin- literally “outside person”) and even 外国人 (gaikokujin- literally “outside country person”) are disparaging names, the word “foreigner” comes from the same Latin root as the Spanish word “fuera”, and therefore originally meant almost exactly the same as “gaijin”
Japan Explained FASAQ 
higanbana said,
December 28, 2009 at 2:35 am
As far as I know, GAIJIN originally only referred to strangers that did not belong to one’s SATO (hometown). And only later on that hometown-feeling started carrying more the meaning of homeCOUNTRY, so all people from outside of that (=foreigners) became GAIJIN.
vitaminc said,
October 28, 2010 at 3:44 am
that’s like saying “negro” is a spanish word, the origin of the word “n*gger” and thus no one should care if anyone calls them that.
Christopher said,
August 7, 2012 at 7:49 pm
Actually, negro IS a Spanish word. It means “black” and comes from Latin, which Spanish is descended from. In Spanish today, guess what the word is for a black person? Negro. Why? Because it means BLACK. The only racial implication involved is when a specific person decides to make it so by using a tone of voice that implies it, probably similarly to the way the Japanese use the word gaijin. It has no intrinsic negative meaning grammatically or lexically, but it acquires such negative connotations through the way it is used.
alexcase said,
August 9, 2012 at 12:36 am
So, now it is a negative word in English (rather than in Spanish) and only used by people with, at the very least, old fashioned and/ or patronising racial attitudes. The story with “gaijin” is much more mixed.
Aaron Reyes said,
January 19, 2023 at 3:59 am
“gaijin” (外人) and “gaikokujin” (外国人) are both disparaging, even if the disparagement is unintended, unless the user is one herself or himself. The proper way to refer to a non-Japanese person in Japanese is “gaikoku no kata” (外国の方).