Recent survey results suggest that the Japanese feel psychological distance toward other countries in Asia, especially those in East Asia, despite the geographical proximity. While there are various reasons behind such a psychological distancing between Japan and its neighbouring countries, the main factors in the present context are seen to be political and diplomatic issues such as historical and territorial disputes. However, it is not accurate to say that Japanese identity is drifting away from its Eastern origin especially when it comes to sociocultural issues. It is believed that language plays a crucial role in the construction of ‘Eastern' identity in Japan, as the Japanese language has borrowed a large part of its orthographic and word formation systems from Chinese, despite the fundamental grammatical differences between the two languages. In order to analyse the relationship between national identity in contemporary Japan and East Asian elements in the Japanese language, this article sheds light on discussions on the use of loanwords that derive from European languages. In its history, the Japanese language has borrowed Western vocabulary mainly in two ways: loan translations using Chinese characters with Sino-Japanese word formation rules and direct loans using phonetic syllabaries. Today, a particular set of syllabaries, katakana, is used to transcribe loanwords, whereas another set of syllabaries, hiragana, is used for the rest of Japanese writing. The article compares discourses on the two kinds of Western loanwords, Sino-Japanese loan translation and direct loans through textual analysis of newspaper entries and social network posts. While the use of direct loans remains a controversial issue as a possible cause of linguistic corruption, the use of loan translations has never been a target for such criticism. On the contrary, those who criticise the use of Western direct loans tend to praise the practice of loan translation and suggest that direct loans be translated in the Sino-Japanese form. Based on this observation, it will be argued that Sino-Japanese loan translations are conceptually mapped as being ‘authentically Japanese' and ‘durable through time' whereas direct loans are seen as ‘foreign' and ‘temporary', while both types of loanwords are of Western origin. It can be said that loan translations of Western vocabulary are positively perceived thanks to their ‘Eastern elements' such as Chinese characters and Sino-Japanese word formation rules, in contrast to direct loans of Western words that are written in the katakana syllabaries, visually distinct from the rest of the Japanese vocabulary. The article concludes that the ‘Eastern' linguistic identity is therefore observable in terms of the different perceptions of the two types of Western loanwords.