Yes, Japanese people speak English.

I was renting a movie last night from Tsutaya. I was at the check out counter and the clerk asked me a question. He was using teinei (丁寧) Japanese, I couldn't understand and told him as much. He replied in perfect English, "Sir, you currently have another movie rented, Electric Blue. Maybe you are not familiar with the Japanese name of the movie?"

I was shocked, he was a native speaker. Well not really, but I learned he spent 5 years in Boston. This is the first time he spoke to me in English. His English is better than my Japanese and I thanked him for always using Japanese first. I found out, one thing he hated about living in the States was when otaku type people would try and practice their strange Japanese with him. He said in Japanese "this is Japan, learn Japanese and speak Japanese." I wish more Japanese people believed it and lived it.