"(sic)" is used if otherwise a printing or spelling error could be assumed. This is not the case here. To mark an expression as slang (or otherwise nonstandard), italics are the thing to do.

Quotations should be presented as closely to their original as possible. Explanations in brackets are sometimes useful, but will never decrease the offensiveness. Use asterisks or dots if you absoulutely must, and if you trust the reader to know what is meant:

"F*** the J**s!" the Seargeant shouted [asterisks by ed.].

Names are often offensive by convention only. Conversely, the nicest euphemisms, such as "Aborigine", will wear off if the underlying conflicts are not resolved.

Japanese are not a race.