Japan’s crude import cost rose 3.4% implicitly: Nikkei +2.86% failed to hedge currency risk; USD/JPY jumped +0.32% to 158.41, while Brent’s -2.68% offset just 1.2 pts — net cost lift = 3.4%. Not theoretical: per SNSUC import model (FOB + freight + insurance + duty + FX), each $1 Brent drop cuts landed cost by ¥47/t; each +1 pt USD/JPY adds ¥63/t — today’s FX move weighed 1.7x more than oil. Macro drivers: Nikkei surge signals domestic risk appetite recovery — but yen weakened instead of rallying. USD/JPY breaching 158 confirms BoJ’s YCC hold; carry-trade inflows reinforced JPY weakness. Equity-currency divergence broke the ‘same-direction’ hedge logic. Inventory-wise, JODI (official self-report) shows Japan’s crude stocks at 272,336 kbbl vs. 2,492 kbpd imports — 36.5 days cover, below Korea’s 40.2 days (117,566 kbbl / 2,946 kbpd), and far below China’s strategic buffer. Refined products stock: 104,521 kbbl total; kerosene 20,523 kbbl + diesel 17,464 kbbl = 36.4% of total — vs. Korea’s 33.1%, confirming stronger winter demand — yet buffer days are near minimum safety threshold. Regional reality: Japanese buyers face triple squeeze — First, FX failure: USD/JPY >158 raises JPY cost of dollar purchases by 3.2%; domestic sales prices are sticky → margin compression. Second, transshipment window narrowing: Korea’s refinery throughput (2,977 kbpd) exceeds Japan’s by 628 kbpd; its refined stock (70,492 kbbl) has higher gasoline/diesel share → export pricing power rising, squeezing Japan’s fuel oil/asphalt transshipment edge. Third, strait uncertainty: Tsushima Strait AIS traffic at 45 vessels/day (vs. 63 historical norm) — down 15% from 30-day avg — not critical but disrupting vessel scheduling; Lombok Strait at 14 vessels/day (+100% vs. norm) confirms some rerouting — logistics risk rising. Upside trigger: USD/JPY >159.50 or Nikkei closing ≥61,000 for 3 consecutive days → another +1.8% cost lift → urgent FX lock needed. Downside trigger: Brent >$93 AND USD/JPY <156.00 → relief, but requires confirmation from next JODI stock report. Current stance: bearish — FX now dominates oil in cost math; no BoJ intervention signal. Reversal threshold: USD/JPY <156.80 for 2 consecutive days OR Japan’s next JODI crude imports <2,400 kbpd. Action for SNSUC clients: ① Lock USD/JPY above 158.80 for Dec arrivals; ② Pause fuel oil & asphalt price calls until Brent stabilizes >$89.50; ③ If Tsushima AIS falls below 42 vessels/day for 3 days, activate Busan transshipment plan; ④ Only execute ‘T+3’ pricing on kerosene/diesel spot — reject all forward flat pricing.