From supply chain pressure to energy turbulence: a wavelet analysis of Japan’s energy landscape

What the paper says

Purpose Energy uncertainty is the most severe challenge in Japan, exacerbated by global supply chain disruptions, energy price shocks and climate policy uncertainty. Therefore, this study aims to explore the time-varying nexus between supply chain pressure, consumer energy prices, climate policy uncertainty and energy uncertainty and how these interdependencies evolve over time. Design/methodology/approach The research ascertains descriptive statistics and the correlation between model variables. After assessing descriptive and correlation analysis, this study adopts the wavelet coherence method to examine the time-variant relationship between model variables. For empirical estimation, this study uses Japan’s monthly data from January 1998 and October 2022. Findings The results reveal significant coherence between global supply chain pressure and energy uncertainty, particularly at medium and long-term scales, suggesting that disruptions in global logistics often precede increases in energy uncertainty. Climate policy uncertainty is strongly correlated with energy uncertainty at medium frequencies, with lead–lag dynamics indicating that policy volatility can drive market instability. Consumer energy prices display a persistent and positive relationship with energy uncertainty at long-term frequencies, reflecting broader macroeconomic and geopolitical influences. Originality/value In the context of Japan, this study suggests the need for diversified supply chains, consistent climate policy frameworks and consumer protection mechanisms to reduce vulnerability to energy market volatility and enhance long-term energy security and offers deep insights into developing countries related to energy management.