Japan in their strategic planning had always envisioned a negotiated settlement, by 1945 however a rift in the Supreme Council for the Direction of the War developed over what course of action Japan had to pursue to end the conflict, Naval Minister Mitsumasa Yonai was in favour of immediately ending the war (reflective of the dire state the Imperial Navy had been reduced to by the campaigns of 1944) but as a whole the council remained in favour of continuing the war. Documentation of the precise discussions that took place in the supreme council during this period is unfortunately lacking with Iris Chaing in her works mentioning that: "the Japanese deliberately destroyed, hid or falsified most of their secret wartime documents."

However it is important to note that when discussing this period there is significant political considerations both in the context of the war and the period following it. The Suzuki cabinet had to keep any negotiations attempts relatively low key because even in 1945 the Imperial Military held tremendous sway over the political fortunes of the Prime Ministers they served. A Japanese prime minister could not remain in office if he could not form a cabinet and both the Imperial Japanese Navy and Imperial Japanese Armies respective high commands held control over who served as minister of defence at their pleasure. If either the Navy or the Army felt as if the Prime Minister was seeking a capitulation rather than an honourable peace with concessions to Japan they could collapse the cabinet and force the appointment of a new Prime Minister. In equal measure following the war there was significant political expediency for Suzuki and his followers to claim they were representative of a broader peace movement in the Imperial Government, but documentation for these explicit discussions in the supreme council is slim and what is present indicated largely a movement for continuing the conflict.

In February 1945, Prince Fumimaro Konoe gave Emperor Hirohito a memorandum analysing the situation, and told him that if the war continued, the imperial family might be in greater danger from an internal revolution than from defeat. According to the diary of Grand Chamberlain Hisanori Fujita, the Emperor, looking for a decisive battle, replied that it was premature to seek peace "unless we make one more military gain".

The peace movement only began gaining traction in the spring of 1945 with the surrender of Germany and the massive allied assault on the Japanese bastion of Okinawa continuing to build pressure on Japan. In April the Soviets informed the Japanese that they were giving the 12 months notice for ending the Soviet-Japanese non aggression pact, unknown to the Japanese around this time as well the Soviet Union concluded agreements with the Allied Powers in establishing timetables for a Soviet entry into the war against Japan by August 1945.

At a series of high-level meetings in May, the Big Six first seriously discussed ending the war—but none of them on terms that would have been acceptable to the Allies. Because anyone openly supporting Japanese surrender risked assassination by zealous army officers, the meetings were closed to anyone except the Big Six, the Emperor, and the Privy Seal—no second- or third-echelon officers could attend. At these meetings, despite the dispatches from Japanese ambassador Satō in Moscow, only Foreign Minister Tōgō realized that Roosevelt and Churchill might have already made concessions to Stalin to bring the Soviets into the war against Japan. As a result of these meetings, Tōgō was authorised to approach the Soviet Union, seeking to maintain its neutrality, or despite the very remote probability; to form an alliance. Documents submitted by Suzuki at the same meeting suggested that, in the diplomatic overtures to the USSR, Japan adopt the following approach:

It should be clearly made known to Russia that she owes her victory over Germany to Japan, since we remained neutral, and that it would be to the advantage of the Soviets to help Japan maintain her international position, since they have the United States as an enemy in the future.

By June however the developments never came to fruition as the Japanese intended and at this time Emperor Hirohito had decided the war no longer had an opportunity for a military victory. The Battle of Okinawa was lost, and he learned of the weakness of the Japanese army in China, of the Kwantung Army in Manchuria, of the navy, and of the army defending the Home Islands. The Emperor received a report by Prince Higashikuni from which he concluded that "it was not just the coast defence; the divisions reserved to engage in the decisive battle also did not have sufficient numbers of weapons." The Emperor wrote: "I was told that the iron from bomb fragments dropped by the enemy was being used to make shovels. This confirmed my opinion that we were no longer in a position to continue the war." On the June 22nd meeting with the senior echelon of the cabinet and war council, the Emperor unusually spoke first: "I desire that concrete plans to end the war, unhampered by existing policy, be speedily studied and that efforts made to implement them." the group agreed to seek a peace mediated by the Soviet Union. The Japanese hoped that the Soviet Union could be persuaded to act as an agent for Japan in negotiations with the United States and Britain in the following period as well.

However it is important to note that no significant progress was made on proposing terms of a peace either by Japan to the Allies or in return, the allied demands for unconditional surrender continued and the war did not significantly change following the battle of Okinawa until the Soviet entry into the war and the atomic bombings occurred.

Japan's discussions with the allies amounted to reiterating demands not comparable with the situation the war had developed to while also maintaining the faint hope the Soviet Union could be convinced to counterbalance the Allies in the situation following the war enough to spare Japan's geopolitical relevance across southeast Asia. This soon was confirmed not to be the case and it is only at this period in August of 1945 that the Japanese priority for peace was solely on the continuation of the Imperial rule.

PS:

In regards to the American's decision to maintain Hirohito this is also deeply rooted in the political and military expediency of the occupation. The allied occupation in the early days of the armistice was a force of merely tens of thousands being responsible for assuming control of the apparatus of government for tens of millions and disarming millions of soldiers still armed and on standby in Japan. Maintaining the Emperor in the period following the war allowed for the usage of the Imperial families tremendous indirect influence over the Japanese people to quickly stabilise the occupation; and provided the complete national cooperation for the Allied occupations constitutional and economic reforms for Japan. By the time the immediate political repercussions of not showing leniency to Hirohito had come to pass, there was no political appetite to anger an otherwise stalwart, stable and exemplary trading partner like Japan had become by reopening wounds about the war.