According to wikipedia Gaijin (外人; “outsider”, “alien”, “Non-Japanese”) is a Japanese word for foreigners and non-Japanese. The word is composed of two kanji: gai (外, “outside”) and jin (人, “person”). Similarly composed words that refer to foreign things include gaikoku (外国, “foreign country”) and gaisha (外車, “foreign car”). The word can refer to nationality, race or ethnicity, concepts generally conflated in Japan.
Some feel the word has come to have a negative or pejorative connotation, while other observers maintain it is neutral or even positive Gaikokujin (外国人; “foreign-country person”) is a more neutral and somewhat more formal term widely used in the Japanese government and in media.
Gaijin Days 