the CPU in general is really bad at blocking things since they're coded to mash buttons currently.
If you score a knockdown off of throw or super or something, throw a kunai as he's getting up and there will be an excellent chance that he'll just eat it randomly, letting you convert for 4 damage. (Often 5 if you have super, or you can just C into C and the CPU will often not break it. Then they're knocked down and you can Kunai again!)
In Dragon form you have to be more careful because Midori is likely to plow through whatever you do with both torpedo and the running grab. Now, you need to flee, throw kunai, keep your eyes peeled for his air throw and yomi counter it. Midori will often struggle to get past your kunai if you keep mashing it for a while, but if he decided to running grab through it, he'll likely push you into the corner, where kunai will be much less effective. Then just sit back pateiently, try to jump over running grabs and yomi counter air grabs. If you jump his running grab on reaction you can hit with j.C j.A A super for 4 damage quite easily.