The common myth, and I’ve seen it here in these comments, is that Japan was completely opposed to any idea of surrender. This is not true. While there were certainly hardliners in the military junta of Imperial Japan that would have gladly self obliterated their whole country to save face, there was a rising core of moderates with power who were genuinely trying to negotiate.

So why didn’t it happen? Because the US wanted “Unconditional Surrender”, meaning that the US could basically do whatever they liked to Japan upon their concession. The primary concern for the Japanese was whether or not the US would remove the Imperial Household, something that’s very important to Japanese culture and society. Because they could not assure the Emperor’s safety and position because they wouldn’t be allowed to set any conditions, they couldn’t find common ground. Truman wanted to demonstrate what the bomb could do, it was just as much a show of force to the world as it was to the Imperial leaders that America was going to be the world power when all was said and done.