By Tom Westbrook and Junko Fujita

SINGAPORE/TOKYO (Reuters) -Investors bailing out of the yen and Japan’s government bonds have driven borrowing costs there to record highs, bending markets out of shape and piling pressure on the country’s policymakers as they try to pilot the economy through a rough patch.

The selloff, which has also rattled stocks, has been unleashed by a lavish stimulus package – set to be the biggest since COVID-19 – that new Prime Minister Sanae Takaichi is expected to announce on Friday.

Her plans will mean yet more borrowing in a quadrillion-yen ($7 trillion) debt market that has been caught off-guard and which no longer enjoys a permanent bid from the central bank or Japan’s insurers.

With long-term government bonds down for 11 days in a row, the yen sliding fo

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