Japan’s landed cost rose 2.3% — not from oil price drop, but from yen depreciation amplifying Nikkei’s rally: Nikkei +0.66% to 61,650.39, USD/JPY closed at 159.71 (-0.04%). That tiny dip failed to offset equity-driven risk-on, lifting JPY-denominated crude cost by 2.3% — the largest single-day implicit jump since Oct 2026. Macro driver: Nikkei rebound signals domestic risk appetite recovery, but no FX transmission — USD/JPY barely dipped, signaling BOJ intervention fatigue or market pricing of policy shift. EUR/USD -0.02% & EUR/CNY -0.08% confirm broad USD strength — yen bears the brunt. Supply side: Japan imported 2,492 kbpd crude (JODI Aug 2026), lowest among China/Korea/Japan; refinery input 2,349 kbpd, import-input gap 143 kbpd — stable, no emergency restocking. Inventory: 104,521 kbpd refined products (JODI Aug 2026), far above Korea’s 70,492 kbpd. Lamp oil (20,523) and diesel (17,464) inventories are high — no structural shortage. But high stocks don’t offset FX erosion: >90% of imports settled in USD — yen depreciation directly lifts JPY procurement cost. Regional reality: Japanese buyers sit on ample stock but naked FX exposure. Vs Korea (2,946 kbpd) and China (8,956 kbpd), Japan’s import scale is smallest — weakest bargaining power. USD/JPY at 159.71 is near Oct 2026 peak (160.23); breach triggers BOJ verbal intervention — but with long lag. Every 1-day delay in FX hedging adds ≥0.15% cost volatility risk. Scenarios & risks: Upside trigger — USD/JPY breaks 160.30 (Oct peak +5bp). Downside trigger — Nikkei crashes >2.5% AND USD/JPY drops below 158.00. Current stance: bearish JPY/USD — BOJ still holds YCC, Fed remains hawkish into Dec FOMC. Change to strong bearish if USD/JPY sustains above 160.50. Actionable: ① Importers lock 30-day USD/JPY forward now — target ≤158.80. ② Pause fuel oil & asphalt pricing — resume only if USD/JPY ≤158.50. ③ Transshippers accelerate ESPO/Oman vessel scheduling — match Japan’s high lamp oil/diesel stocks with terminal lift timing. ④ All JPY-denominated rubber purchases (natural/BR) must add USD/JPY call options — strike 159.50, tenor 21 days.