Korean central bank warns of deflation risk

The Korean nation had better be prepared in the event deflation should spring up, the Bank of Korea (BOK) has said. The bank fears a Japan style downward spiral of prices, but acknowledged the fear was low.

The Korea's central bank said that there is a chance the nation will undergo deflation because of housing price hikes and mounting debts in the household and corporate sectors, though the possibility remains low.

''If unexpected economic recession and a burst of the real estate bubble were c