CZK: Koruna Barely Moved Ahead Of Elections

Of note:

EURUSD 1.04bn at 1.1700 (wed).

EURUSD 7.38bn between 1.1600/1.1700 (thu).

EURUSD 1.94bn at 1.1600 (fri).

AUDUSD ~1bn at 0.6500 (mon).

• EURUSD: 1.1550 (982mln), 1.1655 (478mln), 1.1670 (495mln), 1.1700 (749mln).
• USDJPY: 148.30 (335mln).
• AUDUSD: 0.6550 (329mln).
• USDCNY: 7.1400 (520mln).
• USDZAR: 18.0000 (429mln).

Asahi TV reports that Seiji Kihara, chair of the governing Liberal Democratic Party (LDP)'s Election Strategy Committee, has offered his resignation. He is not the first to tender their resignation today in the aftermath of a meeting of LDP lawmakers (see 'JAPAN: Senior LDP Figures Resign, Unclear If Enough To Save Ishiba's Position', 09:11BST). 

• The resignations have not come from Cabinet members, but from the four seniormost officials the organisational structure of the LDP who can be seen to have held a prominent role in the campaign for the House of Councillors election in July. In the election, the conservative LDP-Komeito coalition lost its majority, meaning it now relies on opposition support/abstention in both chambers of the National Diet.
• Prime Minister Shigeru Ishiba must now make the decision on whether to accept their resignations. As noted in our earlier bullet, reports suggest the resignation of LDP Secretary-General Hiroshi Moriyama in particular could impede the functioning of gov't, with Ishiba calling him "hard to replace".
• Political betting markets show that, despite the noise around Ishiba's position, he is viewed as in a relatively stable position for now. Data from Polymarket shows bettors assigning a 25% implied probability that he leaves office in 2025, down from a peak of 77.8% on 26 July in the immediate aftermath of the House of Councillors election.
• This shift comes as polls show rising support for the Ishiba cabinet, with approval ratings in the latest Nikkei/TV Tokyo poll up 10% since July to 42%. Fifty-two percent of respondents also said they do not support an early LDP leadership contest.
• In the event Ishiba does face a leadership race, opinion polling shows a close race between hawkish former Economic Security Minister Sanae Takaichi and Agriculture Minister Shinjiro Koizumi (favoured by 23% and 22% of respondents in the latest Nikkei Shimbun/TV Tokyo poll 29-31 Aug). Ishiba trails in a distant third place (8%). 

Chart 1. Political Betting Market Implied Probability Ishiba Leaves Office in 2025, %

Source: Polymarket

That is a low unrounded print, coming at 2.05% - so only just rounding up to 2.1% and only 1 hundredth above July's print,