You're rightThe problem is this. If we have Japanese characters but are depicted as Caucasian (we're talking multiple people with blond hair and blue eyes), then we only have to deduce that they are Caucasian immigrants.
Secondly, the setting takes place in a fictional Japanese city. Fictional implies a great many things that shouldn't apply to the story.
But this only goes one way
Every fantasy movie = Almost all white characters even where race is vague or unnecessary
Look, they could just as easily have just casted a Japanese actress and given her blue contacts or used CGI or whatever the hell, I don't care
They chose Scarlett because yeah, she's a household name, and yeah, she's got a resume, but they also chose her because she was white XD
I'm just saying Hollywood's racial politics are effed up
I assure you they weren't trying to make a "faithful adaptation"