From p. 4-69 of the Yamaha Service Manual:
100 mm (3.94in) -- "from the top of the inner tube, with the inner tube fully compressed, and without the spring"
Just make sure you've pumped both the fork tube and the damper rod several times (with new fluid in tube) to make sure you've gotten all the air bubbles out, and then let any air bubbles thus generated dissipate to the surface and out of the fluid before compressing the inner tube for the measurement. Motion Pro makes a
Fork Oil Level Tool that makes setting the level really easy -- nearly foolproof and well worth the money if you're going to do this even once.