From my point of view, Good-aligned oni really aren't the problem (on the contrary - they're trying to become part of the solution!); I feel it is the people, the citizens of the Republic of Japan that we are working in, that would be the trouble.The source I was using for the Oni had them quite a bit different than what dann has described and the absolute last thing I’d want to do is disrupt any setting concept.
I think of watching Ghost in the Shell and immersing myself in that city. The people shopping in the marketplace. On the boats. The running children with their yellow umbrellas. The media on the television screens. Even the brown and white dog.
Now, imagine dropping something out of Big Trouble in Little China (like maybe that shaggy brown-furred devil that serves as Lo Pan's pet?). Drop that thing into Ghost in the Shell and watch the city just panic. Wouldn't you if you were in their shoes?
Even if you were part of the large percentage of Republic people that have cyberware installed on their bodies, what is that going to do against a demon?
Sure, there are a tiny amount of people in the Republic that practice low level magic and psychic abilities. Yes, there is the military with all of their 'borgs, bots, and drones.
But the supernatural stuff? The legends become living? I would think that's mostly the New Empire's territory. And the rest of Japan and China as far as they know.
Sherwood Is this how it is in your story? Your Japan? The better we understand your world, the better we make characters that can play like they're living in it, right?