Demon`s Souls is a Japanese RPG but the wrpg and jrpg labels are there to differentiate between two different genre styles. IMO Demon`s Souls should just be considered a RPG. Yes it`s a Japanese RPG but the whole purpose of the jrpg label is to distinguish one subgenre from another. I`d say that Demon`s Souls fits in the modern roguelike sub genre. Just like Diablo does (before any hardcore roguelike fan kills me, keep in mind that Diablo`s gameplay is heavily ripped off from roguelikes. Just because the game mechanics were MAINSTREAM`D (ESPECIALLY in Diablo II) doesn`t mean it isn`t a roguelike or at least a modern roguelike). They`re not full-blown old-school roguelikes with permadeath (though Diablo II does have a permadeath mode called Hardcore) but they are heavily influenced by roguelikes. I definitely don`t think Demon`s Souls should be slapped with the jrpg label. It doesn`t truly reflect the game`s genre. Yes it`s made by Japanese devs. Yes it`s a RPG. But you can`t lump this game together in a big tent with the typical modern jrpg.
This is how I see things when it comes to Japanese-produced RPGs
Demon`s Souls, Baroque, Izuna - Modern Roguelike
Dragon Quest, Final Fantasy 1 and Etrian Odyssey- RPG (no need for the j because it`s basically wizardry, Ultima III (Ultima III did have more freedom though. ie. you could attack innocent people) and maybe some D&D. Newer DQs and Etrian Odyssey have anime artwork but the gameplay is still a lot like Wizardry. When I first looked at the battle screen menus in Wizardry, I was like, `man they weren`t kidding when they said DQ was influenced by this game. Yuuji Horii (DQ game designer) totally ripped off this battle system`. I hate it when western rpg elitists speak as if western computer rpgs were always very open-ended games with a ton of freedom. Mass Effect, Oblivion and Fallout 3 aren`t exactly representative of the genre`s entire history.
Fire Emblem, Shining Force, etc.- Some sort of combination of war games and Ultima III (it had a system where you can move from square to square. Just like many turn-based srpgs do now.)
Final Fantasy 2 and 4 to 13 - prototypical JRPG. Final Fantasy 2j and Final Fantasy 4 basically marked the birth of the jrpg. Phantasy Star 1 started a few unique jrpg themes (the protagonist that speaks for you rather than staying silent or letting you do the talking) but PS1 still feels a lot like an old-school wrpg with those first-person dungeons that just drive you nuts.