TOKYO, July 26 (Reuters) - The dollar fell more than 1 percent against the yen on Tuesday, on investors' growing expectations that the Japanese government's stimulus steps will fall short of initial hopes.

The dollar was down 1 percent at 104.71 yen after dropping as low as 104.625 yen earlier on the EBS trading platform, its lowest since July 14.

The Japanese government is also putting together a massive spending package worth about 20 trillion yen ($189 billion), government sources told Reuters last week, though actual public spending will be far less than the headline number suggests.

(Reporting by Tokyo Markets Team; Editing by Sam Holmes) ((lisa.twaronite@thomsonreuters.com;)(+81 3 6441 1870; Reuters Messaging: lisa.twaronite.thomsonreuters.com@reuters.net))