Sort of.

This comes from the account of Laurens Van der Post, a British colonel and prisoner in Java. He writes that Terauchi Hisaichi had given orders that all prisoners under his control (he commanded the Southern Expeditionary Army so had control over Japanese forces in SE Asia and and the East Indies) were to be executed before they could be freed by advancing Allied forces. Robert Newman writes a fair amount about this in Truman and the Hiroshima Cult, and there is of course Van der Post's own book The Night of the New Moon.

So the order was supposedly given, but it had nothing to do with the invasion of Japan. I think this confusion comes because Van der Post uses the order as evidence that the atomic bombings had saved hundreds of thousands of lives.

It should also be mentioned that, as far as I know, there is no source for this claim other than Van der Post's book.

There is a document that i've seen come up from a search on the subject translated from the HQ of the Taiwan POW camp. It states that "Whether they are destroyed individually or in groups, or however it is done, with mass bombing, poisonous smoke, poisons, drowning, decapitation, or what, dispose of them as the situation dictates..." and "In any case it is the aim not to allow the escape of a single one, to annihilate them all, and not to leave any traces." So based on these documents, and instances of mass killings of POWs in the path of advancing allies (such as the Palawan Massacre in the Philippines), I think the threat to allied POW in Japan is credible, though I don't know if a specific order was issued. link to the doc: http://www.mansell.com/pow_resources/Formosa/doc2701-trans.html