You are partially correct, Japan had been exploring ways to end the war with terms as favourable to them as possible as early as 1944. Further overtures were made through Swedish, Russian and Portuguese diplomatic channels through 1945. The stickler appeared to be the Allieds demand for an unconditional surrender which the Japanese rejected. The main concern was the preservation of the Emperor and his sovereign right to rule. It is sad that bombs were used to push for the unconditional surrender when the Allies use the Emperor to assist in maintain control during the occupation.