Almost every financing number in forex reduces to this one figure. It determines forward-points, the sign of your overnight swap-rate, and whether a carry-trade pays. Market expectations of future rates matter as much as current ones, which is why currencies move on central bank language rather than only on decisions.
Traders watch the two-year government bond yield gap as a proxy, because it summarises expected policy over a horizon that matters.
Example: US policy rate 5.00%, Japanese 0.30%, a 4.70% differential. Long USD/JPY in a standard-lot notional of $100,000 earns roughly $4,700 a year in carry before spreads, about $12.88 a day, ignoring the broker's markup.
Related: carry-trade, forward-points, interest-rate-parity