It was appropriate for the Bank of Japan to continue raising policy interest rates and gradually adjust monetary accommodation, July minutes showed, as underlying CPI inflation neared 2% and financial conditions stayed accommodative. Members stressed preemptive action against upside risks to avoid rapid hikes later, noting the rate remains below the neutral range. One member observed markets expect hikes every six months, but warned the pace could be faster if inflation risks intensify. The timing of adjustments should weigh baseline outlooks, risks from Middle East tensions, AI demand, and FX moves. Policymakers emphasised a shift from lifting inflation to anchoring it at 2%, warning that unchecked upside risks could harm the economy and compel sharper moves. One cautioned that delayed tightening could force double shocks, underscoring the need for nimble policy.