Yes, Moodle works great with Japanese, but that's on my OS X server. Tom Robb, Jay Melton, Scott Weber, Bob Gettings, myself and others all use Moodle on OS X servers in Japanese because the Apache webserver is built in and quite easy to set up with GUI tools (see documentation section: how to set up on a Mac). If no one else has a way to do it on OS 9 easily, I would recommend upgrading to OS X (regular client version, not server version). That would cost about 15,000 yen. If your machine is less than 400mhz CPU, you will probably need to upgrade hardware as well. The eMac is very reasonable. For less than 100,000 yen ($900) you can have a complete Moodle server running at 1.25ghz (fast enough for a single class of 30-40 students in a lab--but no chat). Better yet, G5s are now under 200,000 yen. Remember, you don't have to upgrade the student machines, just the server. If you go this route, feel free to call on me to guide your installation.
I certainly wouldn't recommend running an OS9 server for anything serious.
If you mean can faculty, staff, and students access and manage Moodle running on a (OSX, Linux/Unix or Windows server) server using OS9 on their machines, that works fine.
The main problem is that the HTML editor won't work (AFAIK) on any OS9 browsers, but we have a number of faculty and students using Moodle on OS9 with no other problems.