* Japan's Treasury holdings hit lowest since October 2011
* U.S. bonds in Ireland rises after record drop in February
* Offshore investors bought most agencies in nearly two years
* Foreigners shed most U.S. stocks since September 2015 (Adds details on latest TIC data)
By Richard Leong
NEW YORK, May 15 (Reuters) - China's holdings of U.S. Treasuries grew for a second month in March to $1.188 trillion, its highest level since October, even as overall foreign purchases of Treasuries fell, data from the Treasury Department showed on Tuesday.
Overseas investors also grew discontent with Wall Street, reducing their U.S. stock exposure by the largest monthly clip in 2-1/2 years.
The increase in China's U.S. bond ownership may soothe concerns about whether Beijing may pare back its Treasuries stockpile in retaliation against the Trump administration which has sought to slap stiff tariffs and erect barriers against nations it perceives are conducting unfair trade practices.
Japan's holdings of Treasuries, on the other hand, fell in March to $1.044 trillion, the lowest since October 2011, data showed.
Back in March, the dollar hit a 16-month low against the yen , making it less attractive for Japanese investors to own dollar-denominated investments, analysts said.
From their peak holdings of Treasuries in November 2014, Japan has now slashed its stake by $198 billion.
Meanwhile, the amount of Treasuries held in Ireland rose in March to $317 billion after a record $13.5 billion fall in February, which stoked speculation whether U.S. multinational companies may be repatriating some money back home in the wake of the massive tax overhaul enacted by Congress in December.
Dublin is a major hub for international fund management and custody businesses, but also reflects Ireland's hosting of the European centers of U.S. technology and pharmaceutical companies.
While China's and Ireland's holdings of Treasuries increased, foreigners overall sold U.S. government securities. Their net sales totaled $4.92 billion in March, compared with $43.19 billion in net purchases in February.
Offshore investors unloaded $23.05 billion in Treasuries in March, their steepest monthly sale since December 2016, while foreign central banks added $18.39 billion in U.S. government debt on top of the $19.06 billion they purchased in February, according to the latest Treasury data.
Foreigners, while less keen on Treasuries, scooped up agency securities and corporate bonds in March.
Their net purchases of agencies totaled $25.28 billion, the most since July 2016, while they bought $22.39 billion in corporate debt, the highest monthly increase since November, Treasury data showed.
In contrast, overseas investors sold $24.15 billion in stocks in March, the biggest monthly outflow since September 2015.
The S&P 500 index fell 2.7 percent in March, marking its first quarterly loss since the third quarter of 2015 due to worries about a possible trade war, rising interest rates and pricey technology stocks.
Additional reporting by Dan Burns; Editing by Jonathan Oatis and James Dalgleish