"Mrs Watanabe" walks away from Brazil Japanese retail investors have pulled about $30bn out of Brazil in less than a year as concerns deepen over the stagnation of the world's second-largest emerging market economy. Brazilian-real denominated holdings of Toshin funds, a favourite of the fabled Japanese housewife investor or "Mrs Watanabe," have plunged about 29 per cent since their peak of $102.9bn last July, Nomura told the Financial Times. While analysts initially believed the declines to be temporary, many now see them as part of a structural trend that could prolong the current weakness in the real and signal an end to the so-called "currency war." "The Brazil moment for Toshin funds is over," said Tony Volpon, an economist at Nomura, Japan's biggest investment bank by revenues. We've seen the peak and it's just a question of how low it's going to go. After hitting a 12-year high against the dollar last July, the real has since depreciated about 22 per cent - a move that has been partly driven by Japanese women, who are traditionally in control of the country's vast household savings. Attracted by Brazil's high interest rates, investors in Japan's Toshin funds increased their exposure to the Latin American country from only $6.9bn at the beginning of 2009 to $102.9bn in July last year, according to Nomura. However, that total has since plummeted to $73.1bn in May, according to the most recent figures - a decline almost equal in size to the gross domestic product of neighbouring Paraguay. Fund managers say one of the main triggers for the exodus from Brazil to other markets such as Turkey and Australia has been the reduction in interest rate spreads. Policy makers have cut Brazil's interest rate by 400 basis points since August in an attempt to revive the economy, which has barely grown for the past three quarters. A flurry of capital controls by the government, including the introduction of a currency derivative tax last July to curb the real and protect local manufacturers, have reduced liquidity and cut returns further. In Japan, Toshin funds themselves have also fallen out of favour following a crackdown by regulators on some forms of so-called "currency overlay" funds, prompting a switch to other products such as US real estate investment trusts, said Roberto Nishikawa at Brazil's Itaú-Unibanco. Japan's devastating earthquake and tsunami in March last year have also caused more risk aversion and encouraged greater inward investment, he said. At least one new Japanese equity fund is being created each month because of interest from Japan's investors in supporting the reconstruction effort. Additional reporting by Ben McLannahan in Tokyo