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* BOJ keeps interest rate targets unchanged, as expected
* Board cuts inflation forecasts for this fiscal year
* BOJ adds line saying will ease 'without hesitation' if needed
* Governor Kuroda to brief media at 0630 GMT
TOKYO, July 30 (Reuters) - The Bank of Japan kept monetary policy steady on Tuesday but said it will ramp up stimulus "without hesitation" if the economy loses momentum for hitting its 2% inflation target.
The widening fallout from the U.S.-China trade war has prompted major central banks in the United States and Europe to signal interest rate cuts, putting pressure on the BOJ, which has far less policy ammunition to deal with an economic downturn.
As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%.
The BOJ also kept intact its forward guidance - or a pledge central banks make on future monetary policy. It committed to keep interest rates at current ultra-low levels "for an extended period of time, at least through around spring 2020."
But the central bank added a line in its policy statement that it will take additional monetary easing steps without hesitation "if there is a greater chance the momentum for hitting its price target is lost."
The decision on maintaining its interest rate targets was made by a 7-2 vote, with board members Goushi Kataoka and Yutaka Harada dissenting.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to discuss the decision.
In a quarterly review of its long-term projections, the BOJ slightly trimmed its inflation forecasts for the current fiscal year ending in March 2020, and the following year.
"Japan's economy is likely to continue expanding as a trend, although affected by the slowdown in overseas growth for the time being," the BOJ said in its quarterly report on the economy.
The European Central Bank last week all but cemented market expectations for a September rate cut, while the U.S. Federal Reserve is seen cutting its policy rate by a quarter of a percentage point on Wednesday.
Easing by other major central banks is raising worries of a jump in the yen that could further strain Japanese exporters.
But years of near-zero rates in Japan have hurt financial institutions' profits by narrowing their margin, leaving the BOJ with few tools to fight the next recession, let alone ramp up steps to accelerate inflation to its elusive 2% target.
Japan's annual core consumer inflation stood at 0.6% in June, the slowest pace in about two years.
Weak exports have also cast doubt on the BOJ's view that an expected pick-up in overseas demand in the second half will ease the pain on the economy from a scheduled sales tax hike in October.
Data earlier on Tuesday showed Japan's factory output tumbled the most in nearly 1-1/2-years in June, adding to a slew of indicators suggesting slowing global growth was taking a toll on the export-reliant economy. (Additional reporting by Tetsushi Kajimoto, Kaori Kaneko, Mari Saito and David Dolan; Editing by Kim Coghill)