Great scenario, not that uncommon either.
How would an all out attack turn out
saying UK: 20 inf 5 art 5 arm against GER: 40 inf 15 arm
Then you would probably take out 20 inf (17 says my statistics, but you probably have some air that could be used in round 1 of combat).
Then you leave it to USSR to take out 20 inf 15 arm and say 5 jap figs with 27 inf and 17 arm this is a 50-50 battle if the USSR also has a few figs to bring.
If a huge Jap stack will move within striking distance then can’t see how even a succesfull attack can prevent Russia from falling next turn.
The option of advancing is intriguing, but it is hard to give that advice without knowing the situation in Europe exactly. Best case would mean that both Russia and Germany falls, which would still mean that the game is open.
Retreat to Russia is the safe play - as long as it is Germany that captures Caucasus, you might be able to recover. It is all depending on the general situation - how is the IPC balance? - what is the US doing?
Retreating might actually make the German overspend a bit to reinforce the front with 4 units in Cauc, which could be what will make him lose Germany.
So retreat or advance is what I would do.