: How do I have to refer to a person of a specific racial group? My novel is developed in an East Asian environment (specifically Japan) and my main character is not Asian, she is from Central

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I would say use stereotypes to your advantage with this, and be descriptive more about colors and features rather than specify race. This is dependent on your character however, and the context is important, @FraEnrico has a good answer on that.
I would use imagery with these stereotypes to provide a general region for where she's from. For example:

I looked at her with a sideways glace, her straight hair as black as a crow with a jaw as sharp as its beak. She glanced over, her almond colored eyes with the same shape seemed to stare into my soul.
I quickly averted my gaze, no longer interested in the pale beauty next to me.

In the example, I show that my character doesn't necessarily relate the woman to someone of East Asian descent, but it's made clear in the text that they may be from that region (allowing that the character knows that the world is bigger than their country). I use stereotypes of certain groups of people to help describe my characters based on my readers, and adding in dialogue descriptions can clear up any of the remaining confusion.

She spoke with a slight lilt, as though this wasn't her first language.
"Excuse me for just a moment", she said as a ringing could be heard from her pocket. She answered quickly and harshly yet with a seeming familiarity, as if she had known this person for a long time.
Definitely not from around here, I thought as she continued in the jarring conversation. I heard a silence and noticed she had finished her conversation.
"Sorry about that, my mom wanted to check on me."

This can be used for any look or race of person, and lends ambiguity to the character you're describing. At any point you can continue to add details to the story that help clarify the portrait of this person, so that even if your character knows them well, the description doesn't seem forced. Given this ambiguity you can further use the details to develop the story, adding physical abilities as well as demeanor and even their "presence" (intimidating, open, etc.).

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From the viewpoint of a native speaker of UK English.......

We would never say "Caucasian" in this context, other than possibly when trying to be humorous.

We would say "European" to mean one of the following:

from the continent of Europe, but not from Britain
from either the continent or from Britain, but not from the Americas, Australia etc.

If we didn't know where the person was from, we would most likely say "White". I don't know anybody who would consider this derogatory or racist.

The use of the word "girl" may be seen by some people as disrespectful when talking about an adult. "White woman" would be safe. "White lady" would be safe, but old-fashioned, and would be more likely to be used if either the speaker or the person being spoken of were elderly.

The word "Asian" tends to be used in Britain to mean what might be more precisely called "South Asian", that is to say, Indian, Pakistani, Bangladeshi or Sri Lankan. The sentence "I've invited an Asian friend and a Japanese friend" does not sound odd in British English.

Just returning to the word "White", and the use of colour words to denote ethnicity. "White" is not derogatory. "Black people" is not derogatory, but "Blacks" often is. "Yellow" is definitely highly derogatory. "Brown" just sounds very odd - it is more likely to mean "white person with a suntan".

I hope some of that helps.

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You can have her describe herself in an indirect manner, like

My colleagues label me as a "caucasian" or "white"... Sometimes they use even more derogatory terms when they think I'm out of earshot.

Use terms used for white people matching the locale. It has the added bonus that it doubles as a description of the protagonist's relationship to her surroundings, especially to other characters. Then, you can add a 'neutral' description for the reader's benefit, maybe as a continuation of her narration.

Sure, at a gathering I'd definitely stand out with my paler skin and my large, round eyes missing the fold. That is if you look that close and don't stop at noticing that I usually tower over the crowd.

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One thing you should take into consideration is how has Asia influenced your character. Also, where in Asia? Asia is massively diverse and complex, so your character might use different language depending on who they are talking to.

Example:

If your character is talking to a Thai local, they might use the word "Farang"
If your character is talking to an Indonesian local, they might use the word "Bule"
You might have to generalize and just use American or European. You don't have to say white. If it's someone of African decent (or any other non-caucasian background), then usually you have to explain. Many Asians think people of color are all from Africa (of course it's a blanket statement), unless they actually care to understand more about cultures than their own.

Basically, the way your character refers to someone all depends on how integrated and familiar your character is with the local culture. Of course, it all depends on who they are talking to as well.

If you are talking to someone who speaks very little English, if your character is empathetic enough, they might use simplified or even broken English just so they can communicate.

Lastly, if you haven't been to the country in which your character is in, maybe visit an expat forum and ask about people's experiences with communicating with locals, and how they might have to change they way the speak. I know I've had to do it many times.

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I've heard shape of the eyes being used as an indicator, don't remember the term anymore, it was something like round eye:
www.urbandictionary.com/define.php?term=round%20eye

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You can use "long nose" too for a funny one, as after the skin colour, this is the first thing than usually come to mind.

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If your main character is Caucasian, then she would call the new girl whatever the Asians have been calling them, concerning race.
If your MC is NOT Caucasian, and doesn't know the word, then typically what people have done historically is pick some prominent different physical feature about a new race and use that. "Negro" is just "black" in other languages. Your character, compared to Asians, may have brown or yellow hair, or curly hair, a thin face, light pink skin, a large bust. Blue or green eyes. A wrinkle in her eye lids.
Your MC should use the language those around them use. If in an interaction with the new character, the new character reveals she is "Caucasian", the MC can use that thereafter, but would more likely use the girl's name!
As to whether the narrator uses "Caucasian", I personally would not. The way I write (3rd person limited) my narrator may understand my MC's emotions better than the MC herself does, and my narrator is more eloquent in description than the MC, but my narrator doesn't know anything the MC does not know.
So if I were writing, my narrator may describe the girl as seen by my MC, three or four outstanding differences my MC would quickly notice about the new girl (with fresh language to avoid scientific or racist terms), and then my MC would pick one of these prominent features, or if she was Caucasian the feature she herself was known by, and use that.

"Oh my gosh," Alice said. "You're another blue!"
The new girl looked confused. "What's a blue?"
Alice pointed to her right eye, with a grin. "Our eyes are blue! I'm Alice, but everybody calls me Blue, after my eyes, and now there are two of us!"
"Oh. I'm from Norway. Very far north. You're probably from the far north, too, blue eyes are very common."

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I read from your other question that it was going to be in Japan? If so, anyone not from Japan (or anyone that doesn't look Japanese) is Gaijin. Literally meaning outlander (expatriate), but translates to 'strange person', more or less. It is generally accepted that gaijins don't understand the culture and locals tend to be more lenient and understanding because of this, if in bigger cities, of course. Remember, in their culture 'the nail that sticks up must be hammered down', because they are a culture of conformity and uniformity, but generally they accept gaijins don't understand this.

Be warned that in rural areas, Japanese people, especially the elder generation, can still be quite prejudice to what they perceive as Americans (white people) because of Hiroshima and Nagasaki (atomic bombs towards the end of World War II). After all, those weren't military bases bombed, they were just regular cities, filled with civilians. How that wasn't considered a war crime is beyond me.

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You need to be coherent with your context, so you need to use the words that your characters would use. Your language needs to match, or adhere to, the world setting you create.

I will make a very lame example, over-simplified: if my characters were in modern Europe, I would call asians "Asians", but if my characters are racists, I would call them "chinks" or "yellows".

So don't look for the "right" way to name them, or worse, don't go for the "political correct": use the word your characters would use, the one realistic in your setting.

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When I was in Asia the locals referred to them as westerners.

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