It's a strange promotion.

Mikio Aoki, as secretary general of the ruling Liberal Democratic Party's caucus in the House of Councilors, was responsible for leading the party's campaign in the July 11 Upper House election.

Yet promotion awaits Aoki despite the LDP's humiliating setback. On Monday he is set to be the uncontested choice as the next chairman of the LDP's Upper House caucus.

Aoki had openly and repeatedly pledged to "take responsibility" should the party fail to achieve its seemingly modest target of retaining its 51 seats that were up for grabs. The LDP won only 49 and was outperformed by the main opposition Democratic Party of Japan, which captured 50.

Aoki's anticipated promotion reflects a serious problem confronting the LDP -- a lack of challengers who can replace the current leadership, including party chief and Prime Minister Junichiro Koizumi himself, even though the party appears to be on a path of long-term decline in voter support.

"I don't think anybody else (other than Aoki) can now manage the Upper House (caucus of the LDP)," Fumio Kyuma, the party's deputy secretary general, said Wednesday.

"Nobody can replace Koizumi, either," said Kyuma, who belongs to the same LDP faction as Aoki.

Aoki and Koizumi have been in the same boat since the veteran heavyweight threw his support behind Koizumi when he sought re-election as party chief last September.

The pair were supposed to play complimentary roles in leading the LDP to a victory in the July 11 election.

Aoki, a veteran lawmaker from Shimane Prefecture, was tasked with cementing organized votes from interest groups, while Koizumi, who has relied on popular support as his power base, was to lure uncommitted urban voters.

Both failed.

The LDP was able to win in only 14 of the 27 single-seat districts in rural areas, where it won as many as 25 seats in the previous election in 2001.

The party also fared poorly among urban unaffiliated voters, apparently reflecting Koizumi's recently plummeting popularity.

A former LDP lawmaker admits that the party's traditional campaign machine isn't working the way it used to.

"The number of supporters' meetings has roughly been halved from the days when I was campaigning," said Kiyomoto Ishiwata, who was an LDP Upper House member until he retired in 2001.

Ishiwata, once elected to the chamber from Kanagawa Prefecture, recalled that when he was a Diet member, a number of local companies and business groups voluntarily organized meetings for him.

But no longer, said Ishiwata, who was campaign manager for another LDP candidate running from Kanagawa in the July 11 election.

LDP lawmakers charge that the policies of Koizumi, who has advocated deregulation and cuts in public works spending, led to weakening support in the party's traditional vote-gathering machine, such as the construction industry and farm lobbies.

"That cannot be denied," a grim-faced Aoki said during a TV interview on election day.

Indeed, in the July election, candidates backed by seven out of 10 major interest groups for the LDP won fewer votes than in the previous Upper House election in 2001, despite Aoki's desperate efforts to solidify bloc votes from those organizations.

The groups that collected fewer votes for their candidates included organizations linked to postal offices, World War II veterans, construction companies, families of the war dead, the farm development industry and nurses.

Some of Koizumi's key rivals within the LDP likewise saw embarrassing defeats in their home districts in the July 11 election, significantly reducing their political clout and their potential to launch a challenge to Koizumi's leadership.

The largest LDP faction, led by former Prime Minister Ryutaro Hashimoto, lost 11 seats in the election.

Likewise, Takeo Hiranuma, a Lower House member widely considered a key candidate to someday replace Koizumi at the party helm, saw the defeat of an LDP candidate in Okayama Prefecture -- Hiranuma's home constituency.

"Now nobody has a legitimate cause" to challenge Koizumi, Kyuma said.

Satoru Matsubara, a professor in the economics faculty at Toyo University, argues that the current economic recovery has also deprived Koizumi's opponents within the LDP of their cause for rebelling against the prime minister.

The shared argument of anti-Koizumi forces was vocal opposition toward Koizumi's austerity policy and their calls for massive public works spending to stimulate the sluggish economy.

But all of the leaders calling for massive government spending, most notably former LDP policy chief Shizuka Kamei, were easily defeated by Koizumi in the LDP presidential race last year. And their argument doesn't appear to be gaining any traction amid the economic recovery.

"They have no logic with which they can attack Koizumi," Matsubara said.

The next showdown between Koizumi and his LDP rivals, if any, is expected to come when the government and the party are to draw up a framework for Koizumi's pet project of privatizing the postal services.

Many LDP members favor maintaining the current government-run system and keeping the workers at 24,700 post offices nationwide as public servants.

But Koizumi is now once again trying to appeal to voters by categorically labeling anyone who would oppose his privatization plan as an "anti-reformer." On Thursday, Koizumi warned that none of these LDP lawmakers would be given a ministerial position when he reshuffles his Cabinet in September.

Matsubara is rather optimistic that Koizumi will be able to win a party consensus for launching privatized postal services in one form or another in 2007, given Koizumi's determination and the reduced power of his LDP rivals.

But Matsubara warns that the true success of Koizumi's postal privatization program will depend on whether legislation that comes out of the LDP-government debate will ensure that the "yucho" postal savings system would be fully privatized -- even if not by 2007 but sometime in an undetermined future.

Full privatization of the yucho system "is a critical issue for redesigning Japan's financial sector in the medium to long term. Much attention should be focused on it," he said.