Oriental isn't offensive in the UK (where he's from) although his refusal to apologise or cease using the term when you claim insult is just him being a cunt.
He said that was the word he was brought up with, which is correct and isn't racist in the UK.
If OP has then gone "Well things are different over here" instead of "That's the excuse racists use when they say the word nigger" maybe the outcome would have been very different.
OP was even aware there might be a cultural difference but dived right in to escalating it.
Both are at fault.