I understand the desire to not have a specified area; indeed I was going for an "anytown" sort of setting. However, I do feel that we should specify a country, of only to establish the culture of the setting. There's really no such thing as a nondescript Asian country, and it would be basically impossible to write up a generically Asian character without delving into intense racism.

So here's what I propose: X town in X prefecture, Japan. Having our setting specifispecifically in Japan doesn't limit us to purely Japanese myths, nor purely Eastern myths. Indeed, the juxtaposition of Western and Eastern legends could add a certain flavor to the story.

Thoughts?