dEhiN wrote:So does 洋 mean Asia? And 東 means east, while 南 is south-east?
東 means east, 南 means south.
洋 means ocean, but also "foreign".
The Language Log article
linked by linguoboy explains it.
In Mandarin, for "Orient" we may say Dōngfāng 东方. Dōngyáng 東洋 (lit., "East Ocean") is an old slang term referring to Japan and the Japanese (cf., Dōngyáng guǐzi 东洋鬼子 ["Japanese Devils"], Dōngyáng huò 东洋货 ["Japanese goods"]). Yáng 洋 (lit., "ocean") in Mandarin refers to anything foreign (e.g., chóngyáng mèiwài 崇洋媚外 [lit., "worship of foreign things and fawning over things from abroad"; "xenophilia"], yángrén 洋人 ["foreigner"], xīyáng 西洋 ["Western"], yángcōng 洋葱 ["onion"], etc.). "Orient(al)" refers to a region that includes China, so it can not be considered yáng 洋 ("ocean", i.e., "foreign").
So, from the Chinese viewpoint:
東洋 = Eastern foreign land = Japan (East off China, so it cannot include China itself)
南洋 = Southern foreign land = South-East Asian (but South compared to China)
西洋 = Western foreign land = Europe and Americas