LONDON (AFX) - The yen was down in midday London trade after the release of Japan's anti-deflationary package, which was perceived to be lacking in substance, dealers said. Divyang Shah, strategist at IDEAglobal said Japanese policy makers continue to lack the incentive to reform despite a decade of disappointing growth and a realisation that sustainable growth cannot be achieved without focusing on the non-performing loans. "There are no silver bullets. The anti-deflation package reads more like anti-reform with less substance and still a lot more empty promises," he said. He believes rating agencies are likely to threaten downgrade and Japanese asset weakness should help propel the usd/yen pair beyond the 135 level. "Focus now shifts to the BoJ and given that the government has not delivered much it is likely that the bank might not deliver further quantitative easing," he said. Adam Chester, chief economist at Halifax Group Treasury noted speculation that the BoJ may up their operations purchase of JGBs in the overall market. He added that such measure could be interpreted as a yen negative as it increases the money supply, but also be seen as a measure that helps put Japan back on a firmer footing, which would be yen positive. "Generally the tone is one of disappointment -- the fact that the Japanese government hasn't come through with anything more radical -- and the yen has been trading on the back of that," he said. The focus of attention remains on Federal Reserve chairman Alan Greenspan's Humphrey-Hawkins testimony before Congress on the outlook for a US economic recovery, due at 3.00 pm today. Participants will be looking for confirmation on the Fed's tightening cycle, currently priced into the futures strip, they added. "Greenspan, if anything, probably will help to support the dollar. He is likely to be cautiously optimistic about the prospect for growth, given the strength of the recent economic data," said Chester, who expects Greenspan will stop short of signalling any term rise in interest rates. Just as much attention will be put to the release of US durable goods for January, at 1.30 pm. Meanwhile, the euro was a touch firmer but participants expect the unit to re-test the 0.86 usd level, on the prospect of Greenspan's upbeat comments about the US recovery. Equally, the sterling/dollar pair was off its lows shrugging off weaker growth data, ahead of Greenspan's testimony. UK fourth quarter GDP was revised down to show no growth over the previous quarter, leaving it only 1.7 pct higher year-on-year.