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WASHINGTON, Oct. 17 (Xinhua) -- China continued to increase its holdings of U.S. Treasury securities in August, and remained as the largest holder of U.S. treasuries.

China raised its U.S. treasuries holdings by 34.5 billion U.S. dollars in August, with the total holding up to 1.2005 trillion dollars, the latest data from the U.S. Treasury Department showed on Tuesday.

Japan, which overtook China as the largest holder of U.S. treasuries last October, cut its holdings by 11.4 billion dollars to 1.1017 trillion dollars in August.

By the end of August, overall foreign holdings of U.S. Treasury securities rose to 6.2697 trillion U.S. dollars from July's 6.2503 trillion dollars.

China's forex reserves rose for the eighth month in a row in September as pressure from capital outflow eased.

In January, China's forex reserves plunged below 3 trillion dollars, but as the economy stands on a firmer footing and the Chinese currency, yuan, continues to stabilize, the stockpile has increased steadily since February.

The Chinese economy is expected to continue its steady growth for the rest of this year, Zhou Xiaochuan, China's central bank governor, has said. He expected the economy to grow 7 percent in the second half of this year.