The Bank of Japan is projected to raise its short-term policy rate to 2% from 0.75% currently by the end of 2027, as robust domestic demand will help the economy absorb external shocks from the Middle East conflict, the OECD on Wednesday. The assessment lends support to the BOJ's recent hawkish tilt ahead of its June policy meeting, with the Organization for Economic Co-operation and Development arguing that higher inflation expectations, solid wage growth and a closed output gap justify continued rate hikes.