The Bank of Japan may seek to prevent unwelcome yen rises by tolerating temporary, market-driven falls in long-term interest rates, former BOJ board member Sayuri Shirai said.

Japanese government bond (JGB) yields hit three-year lows on Friday on concerns about the U.S.-China trade war, even as the BOJ cut its purchase of long-dated bonds to prevent 10-year yields from deviating too much from its 0% target.

"The BOJ will probably maintain its current framework and the target range, but tolerate market-driven falls in yields," Shirai said.

"That way, it can head off excessive rises in the yen, without hurting financial institutions," she told .

If yen rises become too sharp, the BOJ may be forced to widen the range at which it allows yields to move, said Shirai.

"The BOJ probably wants to avoid expanding stimulus for as long as possible," Shirai said. "It has already done so much and there's few policy tools left at its disposal."