Well let's go right to the facts out of the Japanese history books.
From the book, "The End of the Imperial Japanese Navy", by Masanori Ito (1956), translated from the original Japanese. (Masanori Ito was one of Japan's leading military commentators, and a personal friend of Admiral Yamamoto).
"Army leaders in Japan felt that the United States could be easily defeated....their hope was that Japan might quickly achieve such overwhelming successes that the United States would accept a compromise peace. The question then remained as to where the battle should be fought."
Midway (and the fake thrust at the Aleutians) became the final target.
IJN Naval Order #18, issued by Imperial General Headquarters, May 5, 1942. It directed Commander in Chief, Combined Fleet to:
"Invade and occupy Midway Island and key points in the western Aleutians in cooperation with the Army, in order to prevent enemy task forces from making attacks against the homeland. Destroy all enemy forces that may oppose the invasion."
The Army-Navy Central Agreement, issued at the same time, stated the Navy's tactical objective was to:
"Attack Midway Island and destroy the enemy's land-based air forces prior to the invasion, and support the landing operations with the main strength of the Combined Fleet."
Remember, Doolittle's raid on Tokyo had just occurred a month earlier (18 April, 1942). No mention is made (from the Army's directive standpoint) of engaging the American fleet.
Masanori Ito goes on....
"According to these directives, the primary objective was the seizure and occupation of Midway Island. But in Admiral Yamamoto's mind, the main (ultimate) goal was to lure the enemy fleet into a decisive surface battle." (meaning after the occupation of Midway, as they believed that the U.S. would not tolerate occupation of their soil east of the 180th meridian, and by occupying Midway, this would certainly lure the U.S. fleet into the final battle of annihilation. Also, as the Combined Fleet approached Midway, Task Force Commander Nagumo believed that no American carriers were anywhere near Midway. He was determined to proceed with the occupation order, according to Ito.)
There is probably some truth to the idea that the Japanese Army General Staff thought that by occupying Midway that the United States might be forced into a compromised peace due to their "drunk on victory" thinking at the time. Of course, the U.S. would never have agreed to that. Hell, the Japanese of 1942 had some goofy ideas, as we did. They believed that the blue-eyed American sailor was no match for the dark-eyed Japanese sailor in night vision, so they trained their Navy in night attacks. Go figure. (hehe, we also believed that all Japanese were near-sighted and wore glasses.)
--uss vincennes
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