From what the Shinobi wiki said (Yes, there is a Shinobi wiki) that Jiro Musashi was flunged into the future, where ZEEDs evil is law. Thus he wouldn't be around his proper time to make baby Joe.
Wow, guess every games have their own wiki now.
We still don't know whether Jiro Musashi will time travel again, but most likely not come back to his year 1200 timeline.
Who knows later he then went to '70 era and Joe Musashi was born several years later to be ninja in '90s.
Or Joe Musashi is the one who travels from future.
Or may be it's alternate reality, just like Cyber Shinobi.