China reduced its holdings of United States Treasury securities in June while retaining its lead over Japan as Washington's largest foreign creditor, figures from the US Department of the Treasury show.

Overall, total foreign holdings of US Treasuries dropped for the third straight month.

China trimmed its holdings 1.7 percent to $1.28 trillion, while Japan, the second-largest buyer of US debt, cut its holdings by 1.8 percent to $1.08 trillion, according to the monthly Treasury International Capital report.