The Battle of Midway had a great impact on the war in the Pacific in 1942. The battle - which the USA won - left the Japanese navy in a state of disrepair.
First, a look at Japanese losses. In the battle, they lost 4 aircraft Carriers. The USA lost 1, the Yorktown. In addition, Japan lost approximately 2,500 personnel, and over 200 aircraft. Their strategic objectives of destroying the American Carriers turned into a complete reversal, and it was the Japanese who lost 4 of their aircraft Carriers.
Capturing Midway Island proved to be a pipe dream. What seemed a possibility before the battle, had now become an impossibility for the Japanese.
For America, it was a sweet victory. Having stood firm in the face of numerous Japanese victories in the Pacific, with European and American colonies being captured, not to mention Pearl Harbor, America had now dealt a decisive blow to Japanese imperial ambitions. Those American Carriers that Japan had twice sought, now clearly outnumbered the 2 Japanese remaining, and gave the US clear naval superiority.
This was the first real American battle victory in the Pacific theatre, the most decisive, and the most critical. It would serve as a catalyst, leading to a string of American victories that would recapture all the lost territory in the region.
The Japanese military could barely comprehend what the defeat meant. The difficulty in obtaining a Japanese victory in the war, had now seemingly become an impossibility. Only the Emperor was given an entirely complete overview of the battle outcome, while others within the Japanese military remained not so well informed. Unlike the USA, Japan could hardly rebuild their aircraft Carriers, and as such the navy was at a serious disadvantage.
The impact would soon be felt as the US began its island hopping strategy. Japan had to be on the defensive, and they began to fortify key positions. At Iwo Jima, the US armies were able to capture the islands, but only after some stiff resistance. Attrition would be the new Japanese policy.
While the Japanese military may have begun to realize that they could not now win, surrendering was not something they considered until 1945, when the Japanese mainland was in sight and after two atom bombs had been dropped. Midway did not force a surrender of any description in 1942 - the Japanese military were very stubborn, and despite the strategic direction of the war after Midway, did not wish to surrender. Kamikaze tactics became a feature in the later stages.
Debate lingers amongst historians as to whether Japan could have won the war even if the outcome of Midway had been more in their favor. Whilst they appeared to be winning at the time, the US could produce a greater number of ships and aircraft which might have made good the losses of their own aircraft carriers. Regardless of this, the impact of the battle on the Japanese navy was critical and put Japan on the path to defeat.