Interest rate differential
The gap between interest rates in two countries. Investors tend to move money towards the higher rate, so a wider gap usually supports the higher-yielding currency, and a narrower gap weakens it.
Example
US 10-year yield 4.96% − Japan 10-year 2.96% = a gap of about 2.0 points, down from about 3.9 in October 2023.
Explained in