Im late to the party on this, but just wanted to add that it is in Gaia, the town in the northeast that is surrounded by mountains (the town where you release the fairy and get Oxyale). The town is the one of two in the game (the other being Elfheim) to have 2 separate white magic shops and 2 separate black magic shops, as they sell level 7 magic in one shop and level 8 magic in the other.
https://gamefaqs.gamespot.com/a/user_image/6/4/4/AAEqD0AAEcF8.jpg