If the setting is unmistakably Japanese then yeah, but if there's a bunch of Tolkeinian fantasy races running around and the dragons are western in style, I'm going to assume they intended on a western version of demon. Like in 'jobless reincarnation' (don't feel like looking up what the japanese title is), everything about the world is western, and the one Japanese girl who got portaled in sticks out like a sore thumb, but there's a whole continent of 'demons' that are indistinguishable anime characters... or furries.

If the setting is unmistakably Japanese then yeah, but if there's a bunch of Tolkeinian fantasy races running around and the dragons are western in style, I'm going to assume they intended on a western version of demon.