Russia can go to war with Japan without it affecting it relations with the other axis, just because Japan and the Soviets are at war dosnt mean it can attack the Euro axis. Iraq is on the Euro board, making it part of the Euro axis in my view, where Russia is forbidden from attacking.
Now your talking about the Soviets retreating, so your saying that the Soviets should declare war against japan, not attack them, and stack everything in Buryatia? This sounds like a terrible long term stratgey, I highly doubt that a 5ipc NO and the extra 2 infantry and 2 ipcs is going to make a difference, espically when you basically invite the Japanese to take 5ipcs worth of tt from you for free.