Will TRUNCATE stop the increase of the DB2 database size?
The fact that you are using the alter tablespace ... reduce max syntax indicates that you're using automatic storage (or DMS) tablespaces.  

Knowing that, truncating a table only frees up the space that the table occupies within a tablespace. (i.e., Db2 releases the extents that are assigned to the table.)   

The reason Db2 can't just give back the space that was freed in the tablespace automatically is because there is no guarantee that the extents that were allocated to the table were located contiguously at the "end" of the tablespace.

Therefore, when you deallocate space in the tablespace (via alter tablespace ... reduce max), Db2 must first "fill in the holes" by moving other in-use extents into the unused extents that were freed when you truncated the table.

See the documentation for reclaimable storage for more details and some pictures of this.