"The PPI number should raise some eyebrows," said Rafael de la Fuente, an emerging markets analyst at BNP Paribas.
He said that if price increases also showed up in next week's US consumer price index, that "could suggest that the Fed could be a little behind the curve."
Investors buy emerging market bonds because they offer higher yield to compensate for greater perceived risks. The more yield "risk-free" US paper offers, the less reasons investors have to bet cash on more exotic credits.
The yield on the US Treasury 10-year note rose to 4.267 percent, up from 4.19 percent.
The JPMorgan Emerging Markets Bond Index Plus (EMBI+) fell 0.52 percent in total returns, but spreads over comparable Treasury notes tightened by two basis points.
"There's been some selling in our market, but not as deep as we saw in Treasuries," said a sovereign debt trader.
"Basically there's still a lot of appetite for yield in the marketplace and people are seeing emerging markets as a better quality asset than before," he said. "New money is coming in."
Selling was concentrated on the longer end of the Latin American sovereign curve. As inflation erodes the value of bonds over time, concerns over higher prices tend to have more negative impact on paper with more distant maturity dates.
Brazil's global 40, considered the benchmark emerging market bond, dipped 1.250 to bid 116.750.
The flow of good news on Latin American economics continued on Friday as Standard & Poor's revised the outlook on Panama's long-term sovereign credit ratings to stable from negative.
S&P attributed the move to an expected improvement in the country's fiscal deficit and debt dynamics following the recent passage of a fiscal reform package and prospects for social security reform.
The bond market closed early ahead of Monday's Presidents Day holiday.