You are right, spitz-san; it was popularized durng the war to use against the Japanese. Eventually, it started to lose the derogatory meaning, however, a lot of Japanese are still offended by it. I read that Western-born Japanese are especially averse to this until now.
I'm surprised that this is not taught in schools, kahit parang side note lang. Kasi meron akong classmate na nag-exchange program siya sa Japan ng 1 year, she uses the word 'Jap' all the time. Then, recently, I bought this local food magazine that referred to Japanese food as 'Jap chow'. Also, speaking of food, there's this local resto called Jumbo Japs, which I think meant large servings of Japanese food (as in Chubby China).
Btw, I read in Jdorama.com that the initial name of the site was supposed to be Japdorama.com but the owner changed it because of the connotation of 'Jap'. Well, at least, he was aware of it and changed the name right away. ^_^
In the same line, the word 'Nippon' is hardly used these days (same with Nippongo) - instead, the country is 'Nihon'. This is because 'Nippon' is associated with Hirohito and the war and I think it is a sensitive issue for them, hence, the change to 'Nihon'.

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