National Morale reset?

[Kornstalx]

What are the mechanics and exactly what causes NM to completely reset? In my current game as Allies after finishing Germany off I was rolling back all the Japanese advances in China and their NM began to plummet from the losses. However at the start of the turn their NM hit zero, I got two events:

1) Japan's capital suddenly moved to Korea (Tokyo was still firmly Japanese, but I did have troops in Nagasaki)

2) Then immediately another event fired moving the capital back to Tokyo on the same turn

3) Japan's NM reset to 100%.

This NM reset caused me to run out of turns for victory. Is NM supposed to reset like that or is this some negative rollover bug? I've noticed weird things with the NM graphs under reports on all countries, like France going from 0% to 100% after it surrenders. I'm assuming this is so once it's liberated it can fight on fresh again. But whatever caused this to fire for Japan (without capitulation) spoiled my game

[Hubert Cater]

I believe this issue is already on Bill's radar for the next update regarding Japan.