Responsible leaders in Japan recognized that their country's bid for Asian hegemony had failed following the loss of Saipan in July 1944. The Tojo cabinet fell and was replaced by a new cabinet under retired general Koiso Kuniaki. The Emperor's chamberlain, Kido, indicated to Foreign Minister Shigemitsu Mamoru that the Emperor wished to find a diplomatic settlement of the war. However, the intransigent Army leadership made it very dangerous for anyone to propose peace, and the war continued to drag on. Japanese leaders were not ready at this point to surrender on terms acceptable to the Allies in any case. Even the "doves" were prepared to hold out for a negotiated surrender under which Japan would remain unoccupied; would retain control of Manchuria, Korea, and Formosa; and would try its own military leaders for war crimes. These terms were very similar to those given Germany under the Versailles Treaty and would have been rejected out of hand by the Americans. The fear of another Versailles is summarized by Frank (1990), who concludes that "these terms would permit, at some later and better moment, Japan's warriors to inculcate a myth that they were never really defeated and only of their own volition laid down arms to spare the world more ravages of war."
On 11 May 1945 the top leaders agreed to seek peace on these terms through the Russians, but the Soviet ambassador was not approached until 3 June. By then it was far too late for a Russian-mediated settlement, as the Russians were preparing to intervene in northeast Asia.
An important if unplanned step towards surrender was the creation by Koiso of the Supreme Council for the Direction of the War. This consisted of the Prime Minister, foreign and service ministers, and service chiefs of staff. Koiso created it out of frustration at being left out of the deliberations of the Imperial General Headquarters, but the effect was to force the service chiefs to keep the civilian government informed of the progress of the war. It would ultimately be this council that would deadlock on the decision to surrender and create an opening for the Emperor to intervene.
The decision to surrender followed three events that made it clear to all but the most die hard Japanese militarists that the war was lost. The first was the destruction of the Japanese merchant marine, which made it impossible for Japan to import enough food to feed its civilian population, let alone maintain military production. This process was essentially complete by mid-1945. The second event was the dropping of nuclear bombs on the Japanese cities of Hiroshima and Nagasaki on 6 and 9 August 1945. The third was the declaration of war by Russia on 9 August, followed by a swift and crushing invasion of Manchuria.
Historians have long debated the importance of these three elements in forcing the surrender, with those philosophically opposed to the nuclear bombings tending to discount their importance relative to the other two elements. However, there are indications that the nuclear attacks made a profound impression on the Emperor, who broke precedent by acting to resolve the deadlock in the Japanese Cabinet in favor of accepting the Allied surrender terms.
These terms were spelled out in the Potsdam Declaration, and amounted to something just short of an unconditional surrender. The Allies insisted on the occupation and complete demilitarization of Japan, but offered vague guarantees not to deindustrialize Japan and to restore Japanese sovereignty at an unspecified future date. The Japanese leadership were divided over whether to accept the terms of the Potsdam Declaration with the sole additional provision that the Imperial House be retained, or to insist that Japan not be occupied, her military not be disbanded, and any war crimes trials be conducted by Japanese courts.
The Russian declaration of war ended Japanese hopes (never realistic in any case) of an alliance with Russia. However, the Japanese Army still believed, not without reason, that they could inflict serious enough casualties when the Allies invaded Japan (Operation DOWNFALL) to force the Allies to the negotiating table. Prime Minister Suzuki even speculated that the Potsdam Declaration was a sign of weakness. However, on 9 August 1945, Suzuki stunned the Supreme Council for the Direction of the War by inviting the Emperor to express his will and resolve their deadlock. The Emperor promptly called on them to accept the Potsdam Declaration with the sole proviso to retain the Imperial House.
