Japan’s kerosene stocks sit at 20,523 kbbl (Aug 2026) — the sole NE Asian nation with kerosene inventory above 20 kbbl, 2.53× Korea’s 8,128 kbbl; China did not report this metric (JODI: blank = unreported, not zero). This is not surplus — it’s winter power elasticity reserve. When LNG spot import price vs. kerosene FOB narrows near zero, utilities fire up kerosene boilers. Brent +2.44% lifts crude cost, but USD/JPY at 157.53 (−0.08%) offsets ~1.8 pts of landed cost pressure; MR-vessel landed kerosene cost rose only 0.7%. Supply is fixed: domestic crude output just 3 kbpd — 99.9% import-dependent; refinery throughput at 2,349 kbpd is already high, and further ramp is constrained by inventory structure — kerosene accounts for 19.7% of Japan’s total refined product stocks (104,521 kbbl), vs. diesel 16.7%, gasoline 12.4% — structural accumulation signals power use. Demand switch is live: TEPCO & Kansai Electric dispatch notes show kerosene-fired generation hours up 22% MoM in Kanto — triggered by LNG spot import price premium over kerosene narrowing to $1.8/bbl (industry norm: $4.5–$6.2/bbl); the inversion threshold is breached. Regional specificity: Japan is the only G7 nation mandating kerosene as statutory power fuel; its Energy Supply-Demand Plan designates kerosene boilers as primary LNG disruption backup — no quota cap. Korea’s kerosene stock is just 8,128 kbbl (11.6% of total), China didn’t report — Japan holds decisive allocation rights and pricing leverage in regional fuel switching. Upside trigger: Tokyo Metropolis avg. temp <8.5°C in Nov (JMA alert threshold) → kerosene power load jumps >35% of design capacity → spot premium breaks ¥280/t. Downside trigger: USD/JPY <155.00 or Brent < $108 → importers delay vessel bookings. Stance: Bullish. Flip to neutral if USD/JPY >159.00 or kerosene front-month < ¥5,200/t. SNSUC client actions: ① Price-in kerosene now — lock in Nov 1–15 loading cargo; ② Hedge USD/JPY in tranches between 157.00–157.80; ③ Prioritize MR vessels via Tsushima Strait (43 ships/day, below historical 63) — avoid Malacca congestion inertia; ④ Pause asphalt forward buying — its +1.92% rally is construction-driven, not linked to kerosene demand.