Gofer is correct, “Gaijin” is not derogatory. It’s made up of two kanji characters. The first is Gai or Soto meaning “outside” or “external”. The second character is “jin” or “nin” or “hito” meaning person or people. The full term is “gaikoku jin” meaning (literally) “outside country person” (koku = country or nation). In normal conversation, the koku is dropped and you have Gaijin. Tanuki needs to explain that.
Gofer is correct, “Gaijin” is not derogatory. It’s made up of two kanji characters. The first is Gai or Soto meaning “outside” or “external”. The second character is “jin” or “nin” or “hito” meaning person or people. The full term is “gaikoku jin” meaning (literally) “outside country person” (koku = country or nation). In normal conversation, the koku is dropped and you have Gaijin. Tanuki needs to explain that.