This study is a micro-level investigation of the processes of lexical borrowing in a historical language contact situation. It investigates three different types of borrowings from Japanese in the letters of East India Company merchants in Japan, 1613–1622. One type of borrowing in particular, the persistent “incorrect” use of a borrowed term (here called appropriation), is found to fit poorly into traditional models of borrowing. In order to understand rapid synchronic developments in language contact situations, such traditional models need to be supplemented by analyses of the socio-historical and discourse contexts of the borrowing events. The records of the East India Company prove a valuable resource for such studies.