By 1945, the Japanese had been losing the war in the Pacific for two years. They had been driven off the Philippines and other islands that they had occupied. With the defeat of Germany in the European theater, the Russians deployed major portions of their armies to the Russian Far East. The Japanese merchant fleet which was critical for supplying war materials and fuel to the resource poor Japanese home islands had been destroyed. With their major factories destroyed by Allied bombing raids and their remaining battle fleet low on fuel, their situation was desperate. The Japanese tried to negotiate with the American government for a resolution to the war but found the American demands unacceptable. The Japanese prepared for a suicidal defense of the Japanese home islands against the coming American invasion.
In July of 1945, the United States, Britain and Russia convened in Potsdam in occupied Germany to discuss the punishment of Germany and other post war issues. During the conference, Truman was notified about the successful Trinity test of a plutonium bomb during the conference. He hinted to the Russians that the United States had a powerful new weapon but provided no details. Unknown to Truman, the Russians had penetrated the security surrounding the Manhattan project but Stalin was not impressed with what he had been told about nuclear weapons.
On July 26, 1945 the United States, Britain and China issued the Potsdam Declaration demanding the unconditional surrender of Japan to end World War II. The Declaration called for the removal of the Japanese government and military command, the occupation of Japan, lost of all territories conquered by Japan, total disarmament and prosecution of war criminal. The Japanese Supreme Council for the Direction of the War and the Emperor refused the demand and issued their own terms for surrender including allowing the existing Japanese government to remain in control of the Japanese homeland, carry out the disarmament, and prosecute the war criminals. They were also seeking confirmation of Russia’s neutrality according to a treaty they had signed.
On August 9, 1945, the United States became the first nation on earth to use an atomic bomb on an enemy by dropping a uranium gun-type bomb called Little Boy on Hiroshima, Japan. The Russians declared war on Japan on August 8, 1945, and invaded the Japanese puppet state of Manchukuo on the Asian mainland. A plutonium bomb named Fat Man was dropped on Nagasaki, Japan on August 9, 1945. The devastation caused by the nuclear two bombs was terrible with casualties in the tens of thousands.
In light of these new developments in the Pacific War, the Emperor convened the Supreme Council for the Direction of the War. A captured U.S. B-29 pilot had lied to his interrogators and told them that the U.S. had one hundred atomic bombs and would start dropping them on Tokyo and Kyoto in the next few days. The Emperor told the members of his war council that they should accept the Allies terms for unconditional surrender. On August 12, the Japanese sent a telegram to the U.S. government accepting all of the Potsdam Declaration except for demanding that the Emperor retain his power and status. The Allies responded that their occupational force would be the ultimate authority in Japan after the war. The Japanese argued about how to respond and the Allies waited until August 14 and then staged the biggest bombing raid of the war with hundreds of B-29 bombers raining destruction down on Japan. In the meantime, a group within the Japanese military attempted to stage a coup to seize control of the government to prevent surrender. On August 15, a recorded speech from the Emperor was broadcast to the Japanese people telling them that Japan was surrendering.
Japanese foreign minister signs the Japanese Instrument of Surrender for World War II: