I don't think I agree with you, Mr.X.
"Japanese" is a proper adjective. And I don't know what you read in the Oxford guide, but I fear you misinterpreted things:
"4. (often initial capital letter) of, pertaining to, living in, or characteristic of the West, esp. the western U.S.: a Western ranch.
5. (usually initial capital letter) Occidental: to adopt Western dress.
6. (usually initial capital letter) of or pertaining to the non-Communist countries of Europe and the Americas: Western trade agreements."
- Random House
I would have picked the first option, 8769.