You might want to read further back in the thread, chris Dowgin. I suspect you're correct about the Japanese realizing that they couldn't win the war, but when the Emperor did intervene directly and order a surrender after Nagasaki, there were some units of the Japanese military which threatened to mutiny and keep fighting. The Japanese soldiers on Iwo Jima, Saipan, Okinawa and other doomed strongholds also knew that they were defeated, but they fought nearly to the last man anyway.
There were a number of back channel negotiations throughout the war, but without the Emperor's support, none of them went anywhere. Or, maybe they did? The Emperor did remain in his palace after the surrender and he cooperated with General MacArthur and the American occupation authorities. This might have been the result of some of those secret negotiations.
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