The term "Jap" - an abbreviation or an insult?

[sebhaque]

Having a social with some visitors from the US, the chat moved onto cars. I mentioned that I drove a Japanese car and "have great respect for the Jap approach to building cars." Said American visitors were taken aback by this comment, saying that the term was as offensive as the derogatory term to describe Pakistanis.

I raise this thread as a point of discussion. I have certainly never thought the term "Jap" was offensive - it's just an abbreviation for Japanese. While I am indeed almost synonymous with the Pakistani slang, I believe that is only a faux pas due to its past usage. Is this why the Japanese term is a no-no in the US? I'm very confused as to why that particular term is a no-no when I've not heard a word against it.