On June 9, the Emperor's confidant, Marquis Kido Kōichi, wrote a "Draft Plan for Controlling the Crisis Situation", warning that by the end of the year, Japan's ability to wage modern war would be extinguished and the government would be unable to contain civil unrest.
"...we cannot be sure we will not share the fate of Germany and be reduced to adverse circumstances under which we will not attain even our supreme object of safeguarding the Imperial Household and preserving the national polity."
Kido proposed that the Emperor himself take action, offering to end the war on "very generous terms". Kido proposed that Japan give up occupied European colonies, provided they were granted independence, and that the nation disarm and for a time be "content with minimum defense". With the Emperor's authorization, Kido approached several members of the Supreme Council, the "Big Six". Togo was very supportive. Suzuki and Admiral Yonai Mitsumasa, the Navy minister, were both cautiously supportive; both wondered what the other thought. General Anami Korechika, the Army minister, was ambivalent, insisting that diplomacy must wait until "after the United States has sustained heavy losses in Ketsu-Go".
In June, the Emperor lost confidence in the chances of achieving a military victory. The battle of Okinawa was lost, and he learned of the weakness of the Japanese army in China, of the Navy, and of the army defending the Home Islands.
... according to Prince Higashikuni Naruhiko's report it was not just the coast defense; the divisions reserved to engage in the decisive battle also did not have sufficient numbers of weapons. 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 June 22, the Emperor summoned the Big Six to a meeting. Unusually, he 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." It was agreed to solicit Soviet aid in ending the war. Other neutral nations, like Switzerland, Sweden, and the Vatican City were known to be willing to play a role in making peace, but they were so small they couldn't have done more than deliver the Allies' terms of surrender and Japan's acceptance or rejection. The Japanese hoped that the Soviet Union could be persuaded to act as an agent for Japan in negotiations with the Western Allies. There was no agreement on what peace terms Japan might accept, or when to approach the Allies. The leaders of the Army were confident of their ability to deal the Americans a crippling blow when they attempted to invade Kyūshū in the fall.
http://en.wikipedia.org/wiki/Surrender_of_Japan
