Asian equity markets were mixed Friday afternoon as investors weighed signs of cooling U.S. inflation against new tariffs on import of drones and their components by President Trump.

The U.S. producer price index remained flat in July from the previous month. Analysts surveyed by The Wall Street Journal had projected a 0.2% increase. Combined with July's consumer price index data released earlier this week, the PPI figures reinforced market sentiment regarding slowing inflation, tempering expectations for a Fed rate hike at its coming monetary-policy meeting in September.

"The [PPI] reading reinforces the perception that inflationary pressures are beginning to moderate again following the acceleration seen in previous months," XS.com's Antonio Di Giacomo said. "The data take on even greater importance following the previously reported moderation in consumer inflation," the senior market analyst said.

"The combination of a more contained CPI and a PPI reading below expectations strengthens the possibility that the Federal Reserve could adopt a more patient stance at its next meeting," the analyst said. "Investors are assigning approximately a 34% probability that the Federal Reserve will raise interest rates again in September, while around 66% expect rates to remain unchanged," the analyst added.

However, investor appetite was tempered by Trump's fresh tariffs on imports of drones and their components, citing national-security threats. The White House said in a statement that the drone tariff program will protect the security of the U.S. and its defense and defense-adjacent industrial base, while creating jobs.

"China seems the main target of these tariffs," InTouch Capital Markets' analysts team said in commentary. "APAC markets found limited inspiration," the team added.

South Korea's Kospi rose 1.8%, with chip-making index heavyweight SK Hynix advancing 2.8% and global technology company LG Electronics adding 2.4%. Japan's Nikkei Stock Average rose 0.4%, trimming earlier gains. Among best performers on the Nikkei were sports equipment manufacturer Asics Corp., which gained 11.3%, and video game company Nintendo, which added 6.6%. Singapore's FTSE Strait Times Index edged 0.1% higher.

Meanwhile, Hong Kong's Hang Seng Index fell 0.9%, China's Shanghai Composite declined 0.5%, and FTSE Bursa Malaysia KLCI was down 0.2%.