The Japanese military was hoping for the kind of peace Germany got in 1919 only better. The Allies were not interested in a twenty year armistice as that peace was presciently described by Foch.
They could have got terms as good from 1942 on - as soon as it was obvious that they could not win. Japan had no one but its government and its military masters to blame for the war and its consequences.
The Japanese probably did not anticipate the US was going to take such an uncompromising position on negotiations. Why they might have had this impression is that Japan had a long history as an Asian power as being treated with respect, as an equal, in the Great Power club. Once the Japanese lost Saipan and Tojo fell, this should have been taken as the signal that the Japanese were ready to admit they'd lost the war, and start talks.
Japanese were expecting/hoping something similar to Russo-Japanese war. They would score few big wins by help of surprise, initiative and concentration of forces. Conquests would serve both as operational basis and negotiation pieces for the peace. You don't need to keep all you capture, in the end you can make big 'concessions' to other side, making the settlement more attractive to them and still end up with more or less what you originally wanted.
I do not submit to the view that Allied victory in WW2 was inevitable. Sure enough, population and economic statistics heavily stacked the deck to their favour, but the cards still needed to be played. After the first part of their plan went quite well (in some ways even better than they hoped), they fell victim to what they called 'victory disease' or what I call 'one more push -syndrome'. Hey, we achieved a good but not complete success here, maybe if we try it again with just few more ships and battalions, it will work out...and before you know it, you're no longer scoring overwhelming victories, you are trading ships and men at 1-to-1 rate which you can ill afford.