Japanese naval strategy was highly influenced by a U.S. naval officer named Alfred Thayer Mahan who wrote an enormously influential book in the late 19th century called The Influence of Sea Power Upon History. All the world’s naval powers incorporated Mahan’s central tenets into their naval strategy to one degree or another, and the Japanese were no exception.

One part of Mahan’s theory that Japan became very fixated on was the notion of a naval war being decided by a single, large battle between large fleets (think Battle of Trafalgar). Japan’s naval strategy accordingly became focused on the kantai kessen, or “decisive battle.” It was a somewhat narrow perspective on naval power, but it was seemingly validated by Japan’s stunning victory against the Russian fleet in 1905. Moreover, the Pearl Harbor attack was planned partly as a means to weaken the US surface fleet before the impending Big Decisive Fleet Brawl…which ultimately never transpired (at least not in the way Japan intended.)

Accordingly, the Japanese saw submarines as supporting assets for the surface fleet. Submarines were intended as scouting and screening assets that could also whittle down the enemy fleet before and during the Big Battle. Their fixation with fleet battles effectively blinded them to the submarine’s strategic capability as an economic and logistical weapon. This was the case with all major navies prior to WW1 and, even after that war displayed capability of the submarine to isolate an island nation, most senior leaders of the Japanese Imperial Navy remained committed to the primacy of the battleship. Submarines and aviation, they felt, existed primarily to support the surface fleet.

The Americans recognized that dependence on merchant shipping was a major Japanese vulnerability. The US Navy thus adopted the same strategy that Germany (almost successfully) employed against Britain in both world wars: cutting them off by destroying their merchant fleet using submarines. Germany knew in both wars that its surface fleet could not defeat the Royal Navy, which was thus able to blockade Germany with impunity. This led Germany to the realization that its U-boats could be used to retaliate with a “blockade” of their own. Japan, conversely, entered WW2 with a large and formidable surface fleet and thus had less impetus to think creatively about how to fight asymmetrically at sea.

The envisioned length of the Pacific War was also a factor. Japan, like Germany in WW1, knew that their relative economic weakness meant that a quick victory was essential. Tokyo hoped that their strategy would secure a Japanese victory within a few months or perhaps a year, as had happened during the Russo-Japanese War. Instead of another Tsushima, however, Japan got a carrier battle at Midway which permanently neutralized its most powerful naval asset. And this was followed by a protracted war that allowed the US to successfully execute its own German-style submarine campaign against Japan’s merchant shipping.

tl;dr Japanese admirals’ obsession with battleships and big fleet-vs-fleet engagements blinded them to the wider strategic potential of submarines.