China trimmed its holdings of U.S. Treasury securities in June to $843.7 billion, according to the U.S. Department of the Treasury.

This was the second straight decline, but China remains the largest foreign holder of U.S. Treasury securities, followed by Japan and the UK.

Meanwhile, by the end of June, China's foreign exchange reserves stood at more than $2.45 trillion, with the bulk in low-yielding U.S. Treasury securities.

With U.S. deficits piling up, risks of investing in U.S. dollar assets are on the rise, prompting China to diversify its portfolio of foreign exchange investments, said Zhang Ming, a senior researcher at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences.

In its latest move, China snapped up $5.3 billion worth of Japanese government bonds in June, the sixth straight month of net buying, said the Ministry of Finance of Japan.