In August 1945, the overall strategic situation of Japan was dire. The Japanese had pretty much lost air superiority throughout the remaining territory it held (SE Asia, NE China, Taiwan, Korea) and the home islands. In the home islands themselves, the situation is quite bleak. Allied bombers and fighters had pretty much free range over Japanese territory. Fighter aircraft from Iwo Jima and Okinawa have already started to make free ranging sweeps over Japan itself, attacking targets of opportunity. The B-29 fire raids destroyed a large proportion of Japanese cities and burned out major metropolitan areas. The destruction of Japan's transportation network also precipitated a wider economic collapse. Japan in August 1945 has also lost naval superiority and the Allied blockade has cut Japan off from its overseas territories. Allied submarines are already ranging in the Inland Sea and aerial mines have made blockade running risky and choked Japan's waterways. The loss of naval superiority is exemplified by the Allied surface bombardment of Japan in July-August by battleships and cruisers. The few floating Japanese ships like the Nagato were non-operational and unable to respond to an Allied task force cruising off its shores. The remaining airplanes in the Home Islands were being husbanded for major operations as Japanese fuel reserves are at critical levels and ersatz fuels could not fill this gap. Outside of the Home Islands, Japan's armies in SE Asia were still intact, but it had lost Burma to the British and the Allied blockade had cut the Japanese off from spare parts and ammunition. Japan's strategic reserve, the Kwantung Army in Manchuria, has seen some of its best units shipped away into the Pacific and the Ichi-Go Offensive in China, and a lot of its units were under-strength, ill-trained and poorly equipped to face a Soviet invasion.

In spite of all of this, there were only a few signs that Japan was going to capitulate. Existing Japanese forces collapsed in the face of Allied pressure despite sometimes fierce resistance. The near total military domination over Japan was an apparent fact to many in 1945, the central question for Allied policymakers was translating this superiority into a Japanese surrender.