The "never surrender" strategy that was pursued by the militarist faction of the Japanese high command essentially believed, perhaps not wrongly, that a country like the United States would not be willing to stay in a war that cost it so heavily in blood and treasure. In other words, they believed that this would get the US into a place where they'd be willing to negotiate an end to the war on terms more favorable to the Japanese (as opposed to "unconditional surrender," which is a rather tall order, especially since they interpreted this as giving the Americans an opportunity to destroy their entire Japanese culture and way of life). This was not a universal desire amongst the Japanese high command, but it was there amongst a key faction.

So this is only to say that "winning" is perhaps not what you have in mind — it doesn't mean, say, "conquering the enemy," it can mean "getting different terms." And there is a difference between "defeat" and "surrender" — Japan was defeated well before it had surrendered.

The atomic bombs and the declaration of war by the Soviet Union seemed to throw this strategy into disarray. The atomic bombs were interpreted by some members of the high command as implying that the United States could systematically eradicate the Japanese without suffering many consequences, and the Soviet invasion meant that a ground invasion might be possible by a power that did not care about the cost of war (Stalin had already proven many times previously that he was willing to trade disproportionate Soviet lives for power and territory).

On the Japanese side of things and the end of the war, esp. with relevance to the atomic bombs and the Soviet invasion, see Hasegawa, Racing the Enemy. It is of note that there is considerably historical controversy about the relative importance of the atomic bombs, the Soviet declaration of war, and other factors in the end of the war. The contention that it took both bombs is certainly disputed — while there was an internal reaction after Hiroshima, it is not at all clear that Nagasaki had anything to do with the final decisions.