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Pokemon (with the accent over the e) is a combination of pokketo and monsuta. Both of these are loan words, meaning they were created for the Japanese language from approximation of a word from another language. Though they are based on English words, they are still Japanese.
The English spelling of Pokemon needed to represent the pronunciation found in the Japanese form of the word, so an accent was added over the e to create the same sound.
In English, it is "po-kay-mon."
Interestingly, the second O is not pronounced the same, as the o in Japanese is pronounced like the first o in Pokemon. In order to keep the idea of "Pocket Monsters" the pronunciation in English is like "monster."