It is a racial slur from back during the WWII era I believe. It has mostly stopped having that meaning I think so it suprprises me that anyone would be bothered by it. The funny part, for me at least, is that probably non of the moderators have ever done anything about the use of the word gyped, which is also a racial slur. (Feel free to edit the word out if there is to be some greater form of enforcement.)
The term "jap" is also a reference to the late eighties, when western economy was burgeoning after the "fall of the wall" and whatnot. Here in Norway this period is called "Jappetiden" which roughly tranlslates to "The Japtime", a time where consumers started really spending money on the open market!
But in this context, I see no reason to use.