TOKYO, April 7 (Reuters) - Japanese Finance Minister Satsuki Katayama said on Tuesday that the government would stay in close contact with fellow Group of Seven countries, as uncertainty over the Middle East war has fueled worries about the nation's expansionary fiscal policies.

Japan's government bond yield curve has steepened this week, with the 10-year JGB yield climbing to a 27-year high of 2.43%, while the yen loitered near the psychologically important 160-per-dollar mark, a level analysts warn could trigger government intervention.

G7 finance ministers and central bankers last week "shared views that developments in the Middle East and sharp fluctuations in oil prices are having a broad impact on markets," Katayama said at a regular press conference, when asked about surging JGB yields.

"Our stance has been that we will continue to stay in close contact (with G7 counterparts) and ensure that we clearly communicate our message," she added.

UNEASE OVER RISING FISCAL SPENDING

Analysts say the selloff in JGBs reflects growing unease over Japan's rising fiscal spending to cushion energy costs, a strain made worse by the yen's slide.

Japan's parliament on Tuesday passed a record 122.3-trillion-yen ($765.48 billion) general-account budget for the fiscal year that began in April, after a snap election in January delayed deliberations and forced the government to rely briefly on a stopgap measure.

As Japan's heavy reliance on imports makes its economy vulnerable to surging fuel costs, the government may soon face pressure to compile an extra budget to ramp up stimulus.

The immediate headache is how to pay for fuel subsidies designed to keep gasoline at around 170 yen a litre. Launched on March 19, the programme was estimated at 300 billion yen ($1.88 billion) a month. That bill has since blown out to 500-600 billion yen, as a drawn-out war in Iran drives oil prices higher.

The government ?is tapping 800 billion yen ($5 billion) in reserve funds to finance the subsidies. Even with the passage of this year's budget unlocking another 1 trillion yen, keeping the programme running at its current pace would exhaust those reserves within months.

"Unless the way the subsidies are structured is changed, compiling a supplementary budget will sooner or later become necessary," a government official told Reuters privately.

Prime Minister Sanae Takaichi told reporters on Tuesday that the government "does not believe the situation warrants the immediate compilation of a supplementary budget," noting that it can make use of reserves if needed.

Takaichi said crude oil imports from the United States will likely grow fourfold in May from a year earlier as the government is "doing its utmost" in securing alternative oil supplies to replace cargoes that come through the Strait of Hormuz.

"Japan has eight months' worth of oil reserves. As a result of alternative procurement, it is now possible to secure enough oil supply for this year and beyond while curbing the amount of reserves released," Takaichi said.

Earlier in the day, she told parliament that she had no immediate plans to ask households and businesses to cut energy use in ways that would hurt economic activity, despite supply concerns triggered by the war in Iran.

($1 = 159.8100 yen)

(Reporting by Makiko Yamazaki, Tamiyuki Kihara, Yoshifumi Takemoto and Kiyoshi Takenaka; Editing by Sonali Paul, Shri Navaratnam and Janane Venkatraman)

By Makiko Yamazaki