It's possible in theory. But there are no built-in methods, and no libraries that I know of, so you would need to do a lot of hard work.
First you need to decode the png file. On MIDP 2.0 phones or devices with extension APIs that give you access to the pixel data this would be easy, but with pure MIDP 1.0 it's almost impossible.
Then you would need to write a jpeg encoder.
So what I'm saying is: try to think of a simpler solution that doesn't involve jpegs.