I wrote this up awhile back in response to a question about the response in Japanese newspapers:

I am not an expert on the Japanese side of things, so this is necessarily a bit more sketchy than I would like.

The first reference to the bomb was apparently on August 6, 1945; Radio Domei noted that Truman had announced dropping an atomic bomb on Hiroshima, but did not elaborate or describe the effects. Osaka radio announced that train schedules were disrupted to Hiroshima prefecture, but did not explain why. Other Japanese broadcasters reported that Hiroshima had been raided by a "small number" of B-29s with incendiaries and explosives. (Chicago Daily Tribune, August 7, 1945)

In the morning papers on August 8, 1945, it was announced that the Americans had used a "new-type bomb." They did not call it an atomic bomb, and they did not really state the damage done to Hiroshima. Domei radio gave the following story about the bomb from the same day, as translated by the Associated Press:

The main reason which drove the enemy to the use of a new-type bomb in a raid against Hiroshima yesterday morning is his impatience at the slow progress of the projected invasion of Japan's mainland, informed quarters pointed out here today.

While admitting considerable destructive power for the new weapon, these quarters said the resort such inhuman tactics is sufficient to brand the enemy for ages to come as a destroyer of justice and mankind and public enemy No. 1 of social justice.

Describing how the enemy used such a diabolic weapon for the first time in raids on Japan's homeland, these quarters reported that a small number of enemy planes shortly after 8 a.m. yesterday appeared over the city of Hiroshima and dropped a few new-type bombs. As a result of this wanton attack, a considerable number of houses in the city were demolished while fires were caused to start at several points.

The new-type bomb used by the enemy yesterday morning has a parachute attached to it and explodes in the air before reaching the ground, these quarters said, adding that the destructive power of the weapon cannot be slighted although an investigation is presently under way into the extent of the damage wrought by the enemy's new tactics.

By employing the new weapon, design to massacre innocent civilians, the Americans unveiled to the eyes of the entire world their sadistic nature, these quarters said. What caused the enemy to resort to such bestial tactics which revealed how thin is the veneer of civilization the enemy has boasted of its impatience at the slow progress of the enemy's much vaunted invasion of Japan's mainland.

In view of the gallant resistance of Japanese forces as exemplified by the battles of Iwo Jima and Okinawa, the enemy's home of a quick battle and a quick decision in the forthcoming battle of Japan's homeland has been well nigh frustrated.

Strategic advantages which the Japanese forces are certain to enjoy in the next phase of the Pacific war have made it clear to the enemy that his desire for an early conclusion to the current war of Greater East Asia is mere wishful thinking.

In these circumstances, the enemy has began to employ the barbaric method as a last and desperate resort. Recourse to such an inhuman way of fighting is sufficient to brand the enemy for ages to come as the 'destroyer of justice and mankind' and 'Public Enemy No. 1 of social justice,' these quarters said.

As for countermeasures to the new destructive tactics on the part of the enemy, these quarters revealed effective measures are being worked out by the authorities concerned, adding that the history of war shows that the new weapon, however effective, will eventually lose its power as the opponent is bound to find methods to nullify its effect.

You can see that it is a soup of propaganda and confusion. (Los Angeles Times, August 8, 1945)

By August 9, 1945, the reportage had gotten much more grim. Tokyo Radio reported that in Hiroshima, the dead were "too many to count" and that 'virtually every living thing, human and animal, in the city of 340,000 to 380,000 was 'seared to death' by the blast." Japanese radio accused the US of violating the Hague Convention (the newspapers pointed out that this was "not binding" in the war because the Japanese were non-signatories) and even compared the assault to the "humane" (!!) Japanese bombings of Nanking and Shanghai. (Los Angeles Times, August 9, 1945)

Around this time, the Army Air Forces began showering Japan with propaganda leaflets explaining what the bombers were and what they had done. They were made to look like little Japanese newspapers, with pictures of the mushroom cloud over Hiroshima.

By August 10, the Japanese radio had still not reported the bombing of Nagasaki a day earlier. (Washington Post, August 10, 1945) Instead, Japanese radio in Singapore announced that they too had a weapon "similar to the atomic bomb" and were going to use it. They also claimed the Allies stole their research. Pure propaganda. (Boston Globe, August 10, 1945) On the same day, an ABC outlet in Tokyo interviewed someone who had been at Hiroshima; I have no idea whether his statement was made available to the Japanese, though. (New York Times, August 11, 1945)

On August 11, the Domei agency reported that Japanese had filed a formal protest to the US government to protest its used of the atomic bomb. Within Japan, Japanese media was reporting signs of domestic unrest. Even various newspapers started to blame the government for poor handling of the war and the defense of the homeland. There were rumors of riots in Tokyo. (Washington Post, August 11, 1945) On August 12 and 13, Tokyo newspapers urged unity and obedience, and claimed that they had "sufficient preparations" to deal with future atomic bomb attacks. In foreign broadcasts, the Domei radio station claimed that the atomic bombs were not as powerful as advertised. (New York Times, August 13, 1945)

And on the next day, Hirohito announced the surrender.

What to take away from all of that?

• A lot of confusion
• A lot of propaganda
• A lot of uncertainty

I don't know what the average Japanese citizen thought through all of that, but it couldn't have been good. There are mixed messages all over the place, even without taking into account the foreign information (radio, leaflets) that might be stirring the pot up. It looks, even from abroad, like a country contemplating its end, one way or another.

Again, this is information twice-removed, Japanese propaganda filtered through American propaganda. But still, it paints an interesting picture.

You need to understand the wartime situation from the Japanese point of view. While the average citizen may have begun to realize that maybe the war wasn't going as well as they had hoped (judging by the massive US air raids) there was enough propaganda that the typical citizen was only vaguely aware of the growing American threat to the islands. On the other hand, they were well aware that basic civil services, food, and other consumer products were starting to run low.

Meanwhile, the Imperial War Council had been, over the course of the past few months, discussing ways for Japan to end the war. These were divided into three factions: the dove faction, who wanted an immediate end to the war, regardless of Allied terms (aside from, perhaps, the preservation of the emperor): the moderate faction, who wanted to end the war subject to Japanese conditions (which ranged anywhere from moderate concessions to status quo antebellum), and the outright hawks, who wanted to continue the war until Japan had a better negotiating position.

Japanese scientists were already aware of the nature of atomic weapons. They had also concluded that Japan would not be able to produce such a weapon because the industrial infrastructure required was too high. Thus, the first weapon's detonation, while it certainly caused consternation among the staff-namely, no large raid over Hiroshima had been spotted, but scientists were driven to observe the site and they concluded the weapon, while surely destructive, was likely to be atomic and also probable that the Allies had only one or two available. The bombings failed to change the split Imperial council much, although it did lead Soemu Toyoda to change his opinion from moderate to hawk.

This was also confirmed by Truman's statement that the Hiroshima was the work of US scientific advancement, and his reference to the stopping of a similar program by the Germans.

If anything, though, the war council was thrown into far more consternation when the Soviet Union declared war and invaded Manchuria. This risked not only Japanese possessions in Manchuria and Korea but also meant certain doom for the multi-million man China Area armies that would now be completely cutoff from supply or evacuation. Add to that growing Japanese domestic unrest-as mentioned by restricteddata, some newspapers were beginning to question the government-and the government was in crisis. This realigned the factions into just the dove and moderate factions, and the emperor ultimately decided to surrender unconditionally in response to Allied demands for an unconditional surrender.

The Japanese immediately thought the news that "a new type of bomb" was a farce and that was something that came out of a fiction story book. Orginally, they continued to believe that Hiroshima was destroyed by fleets and fleets of conventional bombers. Later, they realized the raid against Hiroshima was not done with conventional weapons, but rather an atomic bomb, which happened to be delivered by a single bomber. However, the Japanese military and cabinet knew the true reality of the atomic bomb, but they thought that we only had no more atomic bombs left. They decided to continue the war and hoping to go on as if there wasn't any atomic bomb used against them at all. The second bomb was dropped, and it totally shook the Japanese belief that we had no more. Now, the Japanese realized that we may have two or at least 100 atomic bombs, let alone for the fact they obtained this kind of information from a captured American fighter pilot Marcus McDilda who was shot down two days after we nuked Hiroshima, and was tortured into revealing information how the atomic bomb worked and what cities were the next targets for atomic attacks. In fact, based on the information they obtained from the pilot (who actually told them false information), Japanese war minister Korechika Anami told the weary peace and war cabinet hours after Nagasaki was hit:

"[O]ne atomic bomb could destroy 6 square miles, which was equivalent to 2,000 B-29s each armed with 300 conventional bombs of 500 pounds each...The Americans appeared to have one hundred atomic bombs...they could drop three per day. The next target might well be Tokyo."

So that was the main reason why the Japanese wanted to surrender, because they didn't like the idea of a weapon that could destroy an entire city in a blink. The Japanese decided to surrender unconditionally rather than going on with the fight, in fear of our atomic bombs that could destroy their entire nation and there was nothing they could do to prepare such an attack.

|Moreover, the enemy has begun to employ a new and most cruel bomb, the power of which to do damage is, indeed, incalculable, taking the toll of many innocent lives. Should we continue to fight, it would not only result in an ultimate collapse and obliteration of the Japanese nation, but also it would lead to the total extinction of human civilization. Such being the case, how are we to save the millions of our subjects, nor to atone ourselves before the hallowed spirits of our imperial ancestors? This is the reason why we have ordered the acceptance of the provisions of the joint declaration of the powers." - Emperor Hirohito's surrender speech on radio (the first time he spoke to the Japanese nation with his voice heard all across the Japanese public), August 15, 1945.

Several countries had been exploring the options for nuclear energy/weapons during the war years, including the Brits, the Soviets, the Germans, and the Japanese. The logistical and material resources (not to mention intellectual talent) of the US effort were superior. The Japanese quickly realized the nature of the Hiroshima attack but based on their own experience decided that the mind-bending difficulty of building such a weapon made it likely that there had only been one such device used for shock effect. The near-immediate second bombing was the deeper shock for the Japanese leadership, with its implication that the US could produce many such weapons. One writer describes that on August 9 the mood among the Japanese warlord leadership was fairly upbeat until word of Nagasaki arrived, whereupon the mood suddenly changed as the implications sank in.

So keep in mind that the Hiroshima bomb more or less prevented all communication out of the city because of the level of damage -- an investigator was dispatched by the cabinet but didn't report back until right before the Nagasaki bomb was dropped (the head of that investigation, Nishina Yoshio, had actually been the head of Japan's own A-bomb program). As u/TheYellowClaw said, the initial response to Hiroshima among the army was that the Americans probably could not mass produce this kind of weapon; Nagasaki proved that wrong.

I know Nishina died of cancer in 1951; I have no idea if it was related to radiation exposure.

President Truman did release a statement clarifying what had happened to a degree -- he never used the phrase "atomic bomb" but instead referred to a single bomb capable of "destroying the usefulness" of Hiroshima to the Japanese. Here's the text of the speech: http://www.pbs.org/wgbh/americanexperience/features/primary-resources/truman-hiroshima/

That being said, even after Nagasaki the three hardliners on the Big Six (Army Minister Anami, Army Chief of the General Staff Umezu, and Navy Chief of the General Staff Toyoda) refused to budge on their original demands for a four-condition surrender; Japan would have to disarm itself, there would be no occupation, there would be no war crimes trials, and the imperial system would have to stay intact. What broke the deadlock was the carefully-arranged intervention of the Emperor in the August 10th Imperial Conference to discuss the implications of the Atomic Bomb and of Soviet entry into the war. The effect of the bombs on that decision is a whole other can of worms, and it's a question that there really is no good answer to -- for every bit of evidence that can be cited one way there's one to cite another.

For more on this, see Mike Gordin's Five Days in August, Tsuyoshi Hasegawa's Racing the Enemy, and Richard Frank's Downfall. Hiroshima in History and Memory, an edited volume from a few years back, also has some good info.