Is it safe to use a Japan's city name as a snack brand?

I live outside of Japan, but Japan culture and Japanese names are popular here (for restaurants, food/snack names, etc). I am trying to come up with a brand of snack with Japanese name and was thinking of using some city's name because it sounds rather cute or nice when pronounced in our local language. I'm planning to use a hiragana/katakana representation of the name and I've seen Japanese companies do this also.

Any potential issues to look out for?

You would have to check whether the city has a trademark on their name (unlikely). So as long as you don't infringe on other trademarks or misappropriate official logos, etc., you shouldn't run into legal issues.

However, when in doubt, consult a local solicitor.