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After years of splurging on international debt, the worlds two large economies with negative interest-rate policies are showing tentative signs of losing their appetite for foreign bonds.

Investors in Japan and the eurozone have both recently sold more global bonds than they have bought. That comes after years of snapping up foreign debt, as negative central-bank interest rates at home sent money abroad in search of higher returns.

How that trend develops will have a significant impact on international markets, particularly in foreign exchange and fixed income.

Data from Japans Ministry of Finance confirmed this past week that Japanese investors sold around 1.3 trillion ($11.52 billion) in foreign bonds between Jan. 21 and Jan. 28, taking net sales for the past 12 weeks to more than 3.7 trillion, the largest amount since April 2014.

Investors in the eurozone, for which data is more delayed, sold 15.99 billion ($17.2 billion) more in foreign bonds than they bought in the three months through November, becoming net sellers for the first time since 2012.

The reversal is a puzzle for international markets, since the spread between U.S. bond yields and yields in the eurozone and Japan has only grownwhich should make American debt more attractive to global investors.

However, many investors, especially risk-sensitive buyers such as pension funds and insurance companies, want to hedge their exposure to currency movements. And high global demand for U.S. debt has raised the cost of hedging to borrow in dollars. That cost heavily reduces the benefit of buying Treasurys for both European and Japanese buyers.

For bond-market investors, one of the key things you need to bear in mind is the volatility of exchange rates, said Mika Inkinen, analyst at J.P. Morgan. Its not enough to just look at the yield differential, you need to look at whats happened to the cross-currency basis.

One hedging tool, cross-currency basis swaps, allows an investor to swap cash flows in one currency for cash flows in another. But for a buyer with euros, the costs of such swaps have widened markedly over recent years.

At the end of January, a 10-year U.S. bond yielded around 2 percentage points more than its German equivalent and 2.4 percentage points more than a Japanese bond.

But if investors fully hedged themselves against currency exposure, the pickup in yield would disappear completely. After that cost, a U.S. 10-year bond would offer a yield 0.06 percentage points lower than a domestic equivalent for an investor with euros, and 0.7 percentage point lower for a Japanese investor.

The relative attractiveness hasnt increased as much as the nominal difference in yields suggests, added Mr. Inkinen.

Hedging an investment mutes its impact on the exchange rate, but if Japanese and European investors want to benefit from higher yields on bonds elsewhere in the worldparticularly U.S. Treasurysthey would have to buy more bonds unhedged against currency risk.

So how large an impact global flows have on the dollar from now on depends on whether investors will hedge their currency exposure.

If a Japanese or European investor buys a U.S. Treasury bill and fully hedges, the impact on the exchange rate will be much more muted. But if investors continue buying U.S. bonds, and stop hedging, the demand for dollar-denominated debt could fuel a rally in the U.S. currency.

Foreign buying of U.S. credit has been a key, and growing, source of demand ever since the taper tantrum set in motion increasing divergence between U.S. and foreign monetary policies, wrote Nathaniel Rosenbaum, credit strategist at Wells Fargo in a recent research note. (The taper tantrum was when U.S. bond yields briefly surged in 2013 after Federal Reserve officials signaled they would soon end stimulus.)

That demand has reduced U.S. yields, too. According to analysis by Morgan Stanley strategists, yields on U.S. 10-year Treasurys are around half a percentage point lower than would be expected to be based on normal macroeconomic factors.

Recent growth figures show the eurozones economic expansion in line with that of the U.S. in 2016. A pickup in growth in Europe could be another factor making international debt less appealing to local investors.

In that event, the euros decline could eventually come to an end versus the greenback, said Mr. Rosenbaum. We could see a sharp pullback or even a reversal in European demand for American corporate bonds.