Пример кода должен выглядеть так
    public static String test(String data) throws NoSuchAlgorithmException {
        MessageDigest md = MessageDigest.getInstance("SHA-256");
        md.update(data.getBytes());
        return bytesToHex(md.digest());
    }
    public static String bytesToHex(byte[] bytes) {
        StringBuffer result = new StringBuffer();
        for (byte byt : bytes) result.append(Integer.toString((byt & 0xff) + 0x100, 16).substring(1));
        return result.toString();
    }
}

String str = "u0074u0065u0073u0074";
str = new String(str.getBytes("utf-8"), "utf-8");
System.out.println(str); //test