According to Tōkō Kokubo, head of the Momotaro research club in Japan, Momotaro did not emerge from a peach.
In the original 1753 version of the story, the
old woman finds the
magical peach, brings it home, then eats it. After she does, her youth is restored. The
old man comes back to find a lady so young he doesn't recognize her at first. Having trouble believing it was her, he eats the portion of the peach she had left for him, and also turns young. That night they made
passionate love, which resulted in pregnancy towards their first offspring.
The story was changed to which the baby emerges from the peach, in 1887 (
Meiji 20), when it was decided the story would be incorporated into
Japanese textbooks.
Reference: a 2003 episode from a Japanese TV show "Trivia no Izumi"
http://www.youtube.com/watch?v=GEsHeHC-rwI