The Japanese are run by a collective leadership not by a single crazy dictator hell bent on self destruction. They are aggressive, arrogant and prone to self delusion but they aren't stupid and they will know their gamble has failed and will look for a way out if they can.
Google the names Anami, Toyoda, Umezu, and Sugiyama; then tell me that they aren't stupid. Stupidity comes in many forms.
As I said the problem is what terms the Allies offer. OTL the Americans did keep the Emperor after almost 4 years of war. IMO most American people would see victory as enough. (1) OTL the US government had no problem ignoring the wishes of its people when it didn't hang the Emperor and even rehabilitated him. (2) Also remember that Roosevelt wants to fight in Europe not the Pacific. If the Japanese throw in the towel in exchange for certain guarrantees (eg keeping the Emperor, Korea and Taiwan) then I think he would take it. (3)
1) Uh, your record of opinions to date regarding your knowledge of the USA and Americans in general does not exactly instill confidence.
2) Yes, well this was after nearly four years of war in Europe and the Pacific, with the Japanese Navy that launched Pearl Harbor virtually wiped out to the last few handful of vessels. For example, every single last Japanese warship that participated in Pearl Harbor (save for a single destroyer) did not survive the war. Not to mention Japan's cities being burned to ash and bone, and Hiroshima and Nagasaki thrown in for good measure. And unlike the Germans, who feasted on looted food in occupied Europe, the Japanese people at the end of the war were literally starving. So by anyone's measure, the Japanese had been punished enough.
Moreover, at the time it was part of Allied propaganda to ridicule Hirohito for his insignificance and powerlessness regarding his role in WWII decision-making. Had we known then what we know now, a different outcome may have been possible. Abdication, at the very least.
Oh, and the Australians, BTW, were far more insistent that Hirohito hang than the US.
3) "He" would be Impeached by the House, put on Trial in the Senate, Convicted, and Removed. Huge Democratic majorities be damned. As to your record to date regarding Franklin Roosevelt? See (1)
The sticking point would be that he would insist on a withdrawal fom China (4) but as I said the Chinese would soon be gaining the upper hand anyway if the Burma road stays open.(5)
4) About the only way that's going to happen is if the Japanese government stops sending supplies to the mainland. And assassinations galore don't result in Tokyo.
5) As soon as Chaing stops seeing his own generals, and the CCP, as greater threats than Japan. And he stops socking so much of his aid to Swiss bank accounts.
I am not suggesting that the Japanese would throw in the towel in March 1942 but if they can't take Java or Singapore then it's over before its really started. I would expect peace feelers after the Americans win (6) the ATL version of Midway sometime in the summer.
6) Don't you mean IF

they win?