The logging is configured to roll over based on file size and can be modified in the JIRA-INSTALL/atlassian-jira/WEB-INF/classes/log4j.properties file:
log4j.appender.filelog=com.atlassian.jira.logging.JiraHomeAppender log4j.appender.filelog.File=atlassian-jira.log log4j.appender.filelog.MaxFileSize=20480KB log4j.appender.filelog.MaxBackupIndex=5
You can find more information on that in the Logging and Profiling documentation.
Our knowledge base article for How to Rotate Catalina Log File may be useful, also.
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