I18N / UTF-8 versus US-ASCII

Hi,

I'm facing some trouble using the Xalan-j 2.6.0 for transforming XML which
contains Korean characters.
When I use UTF-8 encoding, it makes these characters into garbled mess, like
G;EM
<xsl:output method="xml" encoding="UTF-8" indent="yes"/>
e.g
<Dependencies>
<Source>europeG;EM</Source>
<Target>email_node3</Target>
</Dependencies>
 
But when output encoding is changed to US-ASCII, outcome is all right and I do
not see any garbling of Korean characters.
<xsl:output method="xml" encoding="US-ASCII" indent="yes"/>
e.g.
<Dependencies>
<Source>europe&#54504;&#53552;</Source>
<Target>email_node3</Target>
</Dependencies>
Is it ok to use US-ASCII encoding?
 
Regards,
Amit