Onaga is one tough guy, even on easy. To beat him and still have about half life left, choose Ermac. As soon as the match begins, take out your axe, and wlak to him, attacking. Then, back away and press back + X. You'll do a three hit combo. This is going to be about the only move you should use:

Why? While pressing back, he will try to attack, but slightly miss, leaving him completely open to attack. Also, the axe does a hefty deal of damage.