Son of a Bish...
My GF was a Naval Commander ( a surgeon, though, not a combatant, per se) in the SoPac. He knew MacArthur. He took a sword, somewhere (I think Tarawa), from a dead Japanese officer. He also saw a friend vaporized by a mortar shell. He didn't hate the Japanese either - though I'm sure he hated that war and those that made it happen.
I sort of figured it karma, then, that my Dad (he was a USAF Captain, but a dentist) and Mom lived in Japan - and had a daughter there - from '58-61. Completing the circle, I married a Japanese woman (from Tokyo, naturally).
I totally understand your position. I don't think it racist at all to use the term. In deference to a friend, I might refrain, though. Perhaps we give the Zeke jock a break if he finds it hurtful. That's where I'm at. There's, imj, no serious moral implication to using the term and no associated liability.