Yeah, but not really. They have a word for green, midori, which is much more common. I think the aoi thing is more historical, but since Japan has has Western education for close to a decade (and yes, even before WW2 they sent people to US to copy methods), there’s no generation that grew up without green being green.
Anytime it’s used now it’s just a hold over from those older times, and to be fair English has it’s fair share of antiquated words and phrases.