China increased its Treasury holdings in February by $8.5 billion, its biggest purchase in six months, but Japan's holdings declined.

China's Treasury holdings rose to just under $1.18 trillion, according to the Treasury. Foreign net buying of Treasurys was $43.2 billion for the month.

As trade tensions between the U.S. and China increase, so has speculation that the Chinese could cut back purchases of Treasurys or could even be a seller.

"It's the biggest increase in six months, but it's only an $8.5 billion increase. I don't think it really amounts to much. They're still below where they were in December. Last month, there was a pretty big drop," said Tom Simons, money market economist at Jefferies.

In December, China's holdings of Treasurys were at $1.18 trillion before dropping to $1.17 trillion in January.

China is the largest holder of U.S. Treasurys, followed by Japan, which saw its holdings fall by $6.3 billion, to a total of $1.06 trillion.