Bank of America Global Research flags a scope for USD/JPY upside through Q1 of next year on the back of strong M&A flow.

"We have estimated the average interval between an M&A announcement and completion to be about four months. December is also a seasonally strong month for M&A by Japanese corporates. It suggests Japan's outward M&A would provide support for USD/JPY through announcement impacts and flow into 1Q20. In fact, USD/JPY reversed its downtrend during Tokyo trading hours in August and has grinded higher, partly owning to M&A flow, in our view. Longer term, increased foreign exposure may lift volatility in the FX and equity markets around turns in the business cycle," BofA adds.