* China holdings rise for 6th consecutive month
* U.S. Treasuries show minor outflow
* Foreigners sell U.S. stocks (Recasts, adds details, comment, byline)
NEW YORK, Sept 18 (Reuters) - China ramped up purchases of U.S. Treasuries for a sixth straight month in July, data from the Treasury Department showed on Monday, as the Chinese government saw less need to sell its U.S. holdings because of a steadily improving Chinese currency.
For most of 2016, China had to sell its holdings of U.S. government debt to support its depreciating currency as the government grappled with capital outflows.
That trend has reversed this year as China's holdings rose to $1.17 trillion, making it the largest non-U.S. holder of Treasuries. Since January, China has added $114.9 billion in U.S. debt.
"China has basically gone the other way," said Subadra Rajappa, head of U.S. interest rates strategy at Societe Generale in New York. "They must be happy where their currency is right now because they have been growing their reserves once again."
The Chinese yuan has appreciated more than 5 percent against the U.S. dollar so far this year. In 2016, the yuan weakened by nearly 7 percent.
Japan was the second largest non-U.S. holder of Treasuries, with $1.11 trillion, rising $22 billion for the month.
Global central banks overall increased their holdings of Treasuries to $6.25 trillion in July, from $6.171 billion the previous month.
Data also showed that foreigners sold Treasuries amounting to $490 million in July, after purchasing $19.7 billion in June, data showed. Foreigners have sold in four of the last seven months.
Yields on U.S. benchmark 10-year Treasury notes at the beginning of July were 2.3460 percent, hitting a high of 2.3980 percent and ending the month at 2.2920 percent. On Monday, U.S. 10-year yields were at 2.34 percent.
Foreign investors also sold U.S. stocks in July to the tune of $7.66 billion, after outflows of $4.47 billion in June.
Overall, foreigners pared purchases of long-term U.S. securities in July.
Offshore investors purchased $1.3 billion in long-term U.S. assets after buying $34.4 billion the previous month. Including shorter-dated securities, however, overseas investors sold $7.3 billion in July, after buying $5.9 billion in June. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis and Dan Grebler)