After the defeat, Imperial Japanese Navy forces retired. Japan lost four out of their six carriers, and hundreds of their best air pilots. This stopped the expansion of the Japanese Empire in the Pacific, and the Americans began to slowly advance towards Japan.
Japan had reached its first goals quickly, taking the Philippines, Malaya, Singapore, and the Dutch East Indies (now Indonesia). This gave Japan petroleum, which it needed to make more war. Planning for a second part of the operations started in January 1942. However, disagreements between the Imperial Army and Imperial Navy, and among naval commanders, prevented finishing the plan until April 1942. Admiral Yamamoto said he would quit if his plan for the Central Pacific was not accepted. It was accepted.
Yamamoto's main goal was to destroy America's carrier forces, which he saw as the main threat to the Pacific campaign. This concern was increased by the Doolittle Raid on 18 April 1942. In this raid, 16 US Army Air Forces B-25 Mitchell bombers launched from bombed targets in Tokyo and several other Japanese cities. The raid, while militarily unimportant, showed that American bombers could reach Japanese territory. This and other successful raids by American carriers showed that they were still a threat.
Yamamoto thought that another attack on the U.S Naval base at Pearl Harbor would make all of the American fleet to sail out to fight, including the carriers. However, because of the many American land-based airplanes on Hawaii, he thought that it was too risky to attack directly. Instead, he decided to attack Midway, a tiny atoll at the northwest end of the Hawaiian Island chain, approximately from Oahu. The Japanese didn't need Midway but they felt the Americans would try hard to defend it.
The U.S. did consider Midway to be important. After the battle, they set up a submarine base on Midway. That meant submarines operating from Pearl Harbor could refuel and get new supplies, so they could go farther west. Midway's airstrips were also used for bomber attacks on Wake Island.
Like most Japanese naval planning during World War II, Yamamoto's battle plan was very complex. His was also based on incorrect (wrong) information. He thought that and were the only carriers available to the U.S. Pacific Fleet. In May 1942, during the Battle of the Coral Sea, had been sunk and so badly damaged that the Japanese thought she had been sunk. The Japanese also knew that was being repaired on the US West Coast after getting torpedo damage from a submarine. and were in the Atlantic, but the Japanese were not sure this was so.
Yamamoto thought that the Americans had been demoralized by their defeats in the last six months. He thought a trick would lure the U.S. fleet into a dangerous situation. He spread out his ships, especially his battleships, so that they would be hard to find. Yamamoto's battleships and cruisers went behind Vice-Admiral Chūichi Nagumo's carrier force by several hundred miles. Japan's heavy surface forces would wait for the U.S. ships to come to defend Midway, and destroy them.
The plan was for Nagumo's carriers to cause so much harm to US ships that the Japanese could fire on them by daylight.
Yamamoto did not know that the U.S. had broken the main Japanese naval code. Yamamoto's choice to spread out his ships meant that none of his groups of ships could support each other. The only warships larger than the 12 destroyers that protected Nagumo's fleet were two battleships, two heavy cruisers, and one light cruiser.
The Japanese attacks in the Aleutian Islands (Operation AL) took away yet more ships that could have attacked Midway. Many histories once saw the Aleutians attack as a feint to draw American forces away. Early twenty-first century research shows that AL was supposed to be launched at the same time as the attack on Midway. However, a one-day delay in the sailing of Nagumo's ships resulted in Operation AL beginning a day before the Midway attack.
To battle with an enemy expected to have four or five carriers, Admiral Chester W. Nimitz, Commander in Chief, Pacific Ocean Areas, needed every U.S. carrier he could get. He already had Vice Admiral William Halsey's two-carrier ("Enterprise" and "Hornet") force. Halsey was sick with psoriasis and had to be replaced by Rear Admiral Raymond A. Spruance. Nimitz also called back Rear Admiral Frank Jack Fletcher's force, including the carrier "Yorktown" (which had major damage at Coral Sea), from the South West Pacific Area. It reached Pearl Harbor just in time to sail.
The damaged "Yorktown" however, was not completely crippled. The Pearl Harbor Naval Shipyard worked all day and all night, and in 72 hours she was ready to battle for two or three weeks. Her flight deck was patched, sections of internal frames were replaced, and several squadrons of aircraft were taken from "Saratoga". The pilots did not get time to train. Repairs on Yorktown continued even as she sailed out.
On Midway, by 4 June the USN had stationed four groups of PBYs—31 aircraft in total—for long-range reconnaissance duties, and six new Grumman TBF-1 Avengers. The Avengers were taken from "Hornet"s VT-8. The Marine Corps had 19 Douglas SBD Dauntlesses, seven Grumman F4F-3 Wildcats, 17 Vought SB2U-3 Vindicators, and 21 Brewster F2A-3s. The USAAF sent a group of 17 B-17 Flying Fortresses and eight B-26 Marauders with torpedoes: in total 126 aircraft.
During the Battle of the Coral Sea one month earlier, the Japanese light carrier "Shōhō" had been sunk and the fleet carrier had three bomb hits, and was in drydock undergoing repairs. Although the carrier was undamaged, she had lost almost half her airplanes and was in port in Kure awaiting new planes and pilots. No new pilots were available because none had been trained. Flight instructors were used in an effort to make up the missing aircrew.
Japan's two most advanced aircraft carriers were not available and Admiral Nagumo would therefore have only four fleet carriers: and ; and . At least part of this was due to overwork; Japanese carriers had been constantly operating since 7 December 1941, including raids on Darwin and Colombo.
The main Japanese carrier-based aircraft were the Aichi D3A1 dive bomber and the Nakajima B5N2, which was used either as a torpedo bomber or as a bomber. However, production of the D3A had been reduced, while production of the B5N had been stopped. None were available to replace losses. In addition many of the aircraft being used during the June 1942 operations had been operating since late November 1941; many were almost worn out and had become increasingly unreliable. These factors meant that all carriers of the "Kido Butai" had fewer aircraft than normal and there were not enough spare aircraft or parts. I
Japan's main carrier fighter was the fast Mitsubishi A6M2 "Zero".
Japanese scouting before the battle was disorganized. A line of Japanese submarines was late getting into position. This let the American carriers reach their meeting point northeast of Midway (known as "Point Luck") without being found by the subs. A second attempt at scouting, using four-engine Kawanishi H8K flying boats to fly to Pearl Harbor prior to the battle and see whether the American carriers were there did not work out because Japanese subs could not refuel the planes. Japan did not know where the American carriers were before the battle.
Japanese radios did pick up more American submarine activity and messages. Yamamoto knew this before the battle, but Japanese plans were not changed. Yamamoto, at sea on , assumed that Nagumo had received the same message from Tokyo, and he did not send the message, because he did not want the US to hear the message. Nagumo's radio antennas could not get the message from Tokyo.