There are many misconceptions about whether or not, as an English teacher in Japan, you are expected to use Japanese in the classroom. Concerns about using Japanese in the classroom often have nothing to do with fluency (or lack thereof). If you do speak Japanese in the classroom however, be prepared to face complaints from parents, employers, and possibly even students (at the very least, you may face mild annoyance).
Regardless if you are teaching at a public or private school, most likely your employers don’t want you to use Japanese at all. This is often in stark contrast to the job requirements, which often explicitly state that Japanese ability is necessary. This is not for the sake of using Japanese in the classroom - they expect you to be able to carry out your job responsibilities professionally in a Japanese work environment. Many of your coworkers, especially those outside of the English department, cannot speak English well, so the Japanese requirement is strictly for the purpose of daily operations and communication.
Many English teaching positions have no Japanese requirements at all. English conversation schools (eikaiwa) in particular often hire new teachers without any experience teaching in Japan, and therefore assume that their teachers will not use Japanese in the classroom because they don’t know any.
Especially in the case of teaching young children, parents often wait in the lobby or outside the classroom, listening to the class. If a teacher spends more time chatting in casual Japanese with their children instead of strictly forbidding Japanese in the classroom, the complaints tend to pile up quickly.
Some teachers will insist that their students don’t understand them unless they use Japanese. However with very simple yet natural language, careful consideration of the instructions you give, along with gestures and visuals, even students who are very poor at English will be able to understand much of what you say.
With private adult students, the situation can be a little different. With lower level students, sometimes they will actually be quite relieved if the teacher can explain certain things in Japanese. However, even in that situation, it would be a disservice to the student to use substantially more Japanese than English, even when explaining difficult topics.
Outside of the classroom, whether you speak Japanese or not is obviously entirely up to you. But what is expected of you? Many Japanese people who have the courage to speak out to you in English may be sorely disappointed if you start speaking in Japanese despite the fact that you are in Japan.
Perhaps it’s best to look at the situation lightheartedly. If learning Japanese is a personal goal of yours, keep in mind that it may be too much to expect to be able to speak Japanese freely at the workplace if your job is to teach English. However, your passion to study Japanese as a foreign language may come across to your students and inspire them to study English more seriously as well.
Part of assimilating into another culture is having an awareness of what is expected of you - how you respond to those expectations is of course your prerogative, and may or may not reflect cultural attitudes of your own.