Over the preceding five years, USD/JPY has struggled in early October, but then rallied 6.8 percent into year-end on average, with the fourth quarter by far the strongest period for the pair.
Riding long trades into the first week of December produced the best performance with the least downside risk. Dollar funding tends to get pricier as year-end approaches.
Last year was actually the worst Q4 performer in the past five years, essentially flat from October 1 to year-end, so there's no guarantee past bullish seasonality will prevail, but a mid-October rebound would still look attractive, given last year's October 13 to November 1 rise from 111.84 to 114.15.
Not surprisingly, the bullish Q4 USD/JPY seasonality coincides with bullish 2-year Treasury yield seasonality.
Those yields have, on average, risen 40bp in Q4 over the past four years.
In contrast, the BOJ's yield curve control and QQE have left 2-year JGB yields about unchanged around -8bp.
And as one broad risk measure, S&Ps have done best in Q4, with average gains of nearly 6 percent.
The multi-trillion dollar question is whether more pronounced Fed tightening and trade tariffs, and derisking tied to both, will make this year the bearish outlier.