When the round starts, immediately start quickly backstepping or backflipping until you get to a Kamidogu. Wait for Onaga to close. When he does, break the Kamidogu and hit Onaga with your biggest combo.
Then immediately start back stepping or backflipping until you get to the next Kamidogu. Wait for Onaga to close, hit with combo. Go for a third Kamidogu if needed.
Admittedly, sometimes this can be difficult, because Onaga moves forward quickly and has long reach, so he'll sometimes manage to trap you in a corner. There's really nothing for it but to hope for the best. Preferably, you should try to beat Onaga in 2 rounds, because it's really hard to beat him without being able to break 3 Kamidogus.

Onaga is the simplest MK boss ever. All you have to do is sidestep to avoid his fireballs and step back a little to avoid his combos then unleash your own combo on him. Rinse and repeat.

i stay mid range, wait for him to try to kick me or whatever, then go in...I use those things, whatever you call them a lot too

Destroy Kamidogu then combo then repeat.

hes very easy with Lui Kang. i dont even go for the kamidogu just fast combos then back up then fast combos. with lui just do the bycicle kick it works great.