The quote appears in some other papers like this 1991 one by Alperovitz & Messer with reference to the primary sources, which however are almost certainly not online:
Aside from the fact that it would be a rare intelligence officer
who would commit himself unequivocally on so important point as precisely when Japan would surrender, a common sequence of argumentation appears in a series of key documents. A typical statement: If "the U.S.S.R. should enter the war, all Japanese will
realize that absolute defeat is inevitable." Thereafter, goes this argument, the war can probably be ended rather quickly if Japan can be made to understand that unconditional surrender does not imply annihilation or national suicide.
accompanied by a footnote/citation:
Taken from preliminary estimate of the Joint Intelligence Staff on April 11, 1945, NA, RG 165, Entry 421, ABC Decimal File 1942-48, Box 504, "ABC 387 Japan (15 Feb. 45) Sec 1-A," Report by Joint
Intelligence Staff Unconditional Surrender of Japan, JIS143/2,
on April 11, 1945.
Note that there are several documents online titled "Report by Joint
Intelligence Staff Unconditional Surrender of Japan" (obviously an important topic at the time to be worth more than one study/take), but with different dates, so those may or may not contain that quote.
And if you wonder why there are several, a 1976 paper explains that
The planners had requested, therefore, on April 7 that the Joint Intelligence Staff (JIS) make an estimate of the resistance that could be expected from Japan to an invasion of Honshu or any of the home islands
before unconditional surrender had been obtained. Because it was feared
that some Japanese might never surrender, JIS was also asked to evaluate
possible resistance after a formal unconditional surrender. These questions
led directly to the political aspects of the problem; Japanese appreciation
of the unconditional surrender formula. The planners completed their
request to JIS by asking:
a) At what stage of the war will the Japanese realize the inevitability of
absolute defeat?
b) Will such realization result in their unconditional surrender, passive sub-
mission without surrender or continuing resistance until subdued by force?
Three days later JIS replied expressing confidence that the Japanese would
recognize defeat by autumn. But the report carefully distinguished between recognition of defeat and unconditional surrender. The literal meaning of unconditional surrender, JIS noted, "is unknown to the Japanese....
Our meaning of the term cannot be comprehended by the vast majority
of Japanese." [...]
The members of JIS and particularly the area teams that prepared this
general study on Japanese resistance had considerable freedom in making
recommendations. They acted within the staff as experts, not as representatives of their departments. It was otherwise in the Joint Intelligence
Committee which reviewed their work.
[...] Predictably state department representatives found the study unacceptable. [...] In the presence of this determined protest by state department spokesmen JIS entirely recast the paper, eliminating practically all of the attacks
on the unconditional surrender policy.
There was then a JIS143/3 dated April 24, etc.
And another (1995) book of Alperovitz has more extensive quotes from the April 29 version
After consulting with the Joint Intelligence Staff, the Joint Intelligence
Committee forwarded its response to the Chiefs in the form of an April 29
“Memorandum for Information.” This
pointed out that increasing “numbers
of informed Japanese, both military and civilian, already realize the inevita bility of absolute defeat.” It noted, however, that the still indeterminate nature of relations among the Big Three—and of Russia’s role—played a critical role in Japanese judgments. Thus,
military and political authorities, as well as the people generally, may
retain the desperate hope that continued resistance will permit the development of such disunity and war-weariness among the United Nations
as to enable them to obtain peace without unconditional surrender.
The “Japanese will realize that absolute defeat is inevitable,” the committee advised, “when they perceive that their armed forces are incapable of arresting the progressive destruction of their basic economy.” The committee further advised that:
The increasing effects of air-sea blockade, the progressive and cumulative devastation wrought by strategic bombing, and the collapse of Germany (with its implications regarding redeployment) should make this
realization widespread within the year.
A Russian decision to join with the United States and Britain, however,
would have enormous force and would dramatically alter the equation:
The entry of the U.S.S.R. into the war would, together with the foregoing factors, convince most Japanese at once of the inevitability of complete defeat.
which is endnote-cited to
JCS Info Memo 390, “Unconditional Surrender of Japan,” April 29, 1945, “ABC 387 Japan (15 Feb. 45), Sec. i-A ,” Box 504, Entry 421, RG 165, NA.
That book also mentions that
Some of the drafts leading up to this final paper contain additional language which gives a feel for the developing sense of Japan’s impending collapse among intelligence specialists. For instance, the initial April 11 response of the Joint Intelligence Staff (a first draft of what became the April 29 Committee report) pointed out that a large number of informed Japanese realized the inevitability of defeat—despite the fact that it was “only very recently that the full power and potential of Allied capabilities
are being brought home to the masses of Japanese living in the home islands.”
By the autumn of 1945, we believe that the vast majority of Japanese will realize the inevitability of absolute defeat regardless of whether the U.S.S.R. has actually entered the war against Japan.
And, again, of course: “If at any time the U.S.S.R. should enter the war, all Japanese will realize that absolute defeat is inevitable.'
which citing to JIS143/2 again.
But generally speaking the Alperovitz enterprise in these matters has been severely criticized on other grounds (selective sourcing, ignoring intercepts of Japanese comms during the summer):
The principal rule that Alperovitz broke in 1965,
and breaks even more spectacularly in 1995, is the rule that significant
contrary evidence must be noted. Essential information is again missing,
suggesting the long-term prospects for Alperovitz's thesis are dim at best,
fatal at worst. The most disturbing excision is reflected in his claim that the
Japanese during the summer of 1945 had reached a "'unanimous determination' to seek surrender through Moscow" (p. 651). What the MAGIC cables in
fact reveal is unanimity on the part of the Japanese Cabinet to seek a negotiated peace, and disagreement regarding the terms, even the notion, of surrender. Japanese sources, which Alperovitz uses sparingly, suggest the military was pressing for terms far beyond anything Truman would have
accepted, including no American occupation of Japan, exclusive control by
the Japanese government over the conduct of war crimes trials, and retention
of jurisdiction by Imperial Headquarters over disarmament and demobilization. Such perceptual differences matter not at all to Alperovitz. He uses the
terms "seeking peace" and "surrender" interchangeably.
Similarly:
At times written in the tone of an expose,
[Alperovitz' book] The Decision to Use the Atomic Bomb is a
lawyer's brief, repetitively citing evidence that
supports its position, ignoring anything that
does not. [...]
