You might have watched the US Women's team play Japan in the Women's  World Cup Final on Sunday like I did. It was a well-played match with  the Japanese team winning after coming from behind twice to win in  penalty kicks. I watched with family and although we were disappointed  (we were pulling for the US team even though we are Japanese American)  we got over the tough loss and were happy for the Japanese team. 
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| from the Palos Verdes News volume XIV | 
Later that night I checked into twitter to  find "Jap" trending. What? I clicked on top tweets and found many posts  by people as horrified as I was. But when clicking on all tweets I read  tweet after tweet using the derogatory  term Japs. This was upsetting  but not as upsetting as the tweets asking how the term Jap was  offensive. So, here is a lesson for the kids (since many of the  tweets were authored by youngsters) or others who don't know.
Jap was used as a pejorative during World War II. It was used  interchangablely for the people of Japan who America was at war with, as well  as Japanese-Americans (many of whom were removed from the west coast  and interned or served in the armed forces). According to both the  Oxford and Merriam-Webster dictionaries, it is considered a racial slur.  It is not the equivalent of Brit or Aussie. Unless you intend to come  off as a racist, do not use this slur.
This link is to a 
discussion of the twitter phenomenon and here is a link to the 
Densho: The Japanese American Internment where you can learn more about the treatment of Japanese Americans during World War II.