The "X-Men Origins: Wolverine" was a nightmare for Fox. The follow-up movie, "The Wolverine" made no reference to it and set the movie as far as possible.

They gave Wolverine a new love interest and an entirely new setting. The new one was more effective and appealed to all viewers including the comic book fanboys.

Director James Manigold was airtight with any information on the sequel, and shared why Japan is an ideal setting:

In the comics, when Wolverine is not on a mission with the X-Men, he chose to settle in Japan. This is something director James Mangold understands: "If you spend a lot of time in Japan, the truth is there's an incredible amount of style there. The people of Japan exist in a wonderful relation to their imaginations. They lead their normal lives and their normal responsibilities and then can extend themselves in fantasy in a way that's very free and beautiful. And not just geek culture but also the whole country does it. I think it's a very rich tradition."

On the sequel: "Well pre-production - I would say I'm not there yet. But I have taken finger to key. Let's say that. There's been typing. And ideas. And talking amongst all the principles."

Mangold pays a lot of respect with the comic book storylines. He will base the sequel on a comic book miniseries. It should also be taken into consideration that Hugh Jackman almost retired from the role, but agreed to don the claws for this film. It is safe to say that this could probably be the last time Jackman plays Wolverine.

A possible storyline the sequel may follow is "Daken" (Wolverine Origins vol. 3). Daken is Wolverine's son.

Depending on the events of "X-Men Days of Future Past" we may look at Logan in the future. He marries Mariko Yoshida (which would mean she will return along with Yukio). Although Daken has no ties with Mariko since he has a different mother, Mangold may weave their story together, removing the ties with the Winter Soldier (whose rights belong to Marvel).

This is highly speculative, but Mangold has the goal of giving Logan a reason to live-to make a 360 degree turn from the Wolverine who desired death in "The Wolverine" movie.