Oriental always meant the Far East. I'm also not sure when or why it became disfavored as a term for people. It was actually a very good word because it was clear that it included East and Southeast Asians but not South Asians or West Asians. Say "Asian" in London and they'll think you're talking about someone from India or Pakistan.
On that note, I really don't like the US term "Middle East" because it implies that it's in between two other types of East, but in reality we use it to mean "Near East", which is what people in the UK say (more correctly).
Pretty sure it fell out of favor/became considered racist around the time he released his Orientalism book. Personally I think that Oriental is a stupid term as is Occidental. Though I don't find it to be racist. But then again I find the Chinese term Middle Kingdom to be stupid too. Basically any term that denotes centrality and directional status in relation to that centrality is going to be a problem for everyone who is not in the center.