There is a device called a demagnetizer, it is a coil energised by alternating current [plain old house current] You move the magnetized item through the alternating magnetic field, and the item looses it's magnetism. If You have acess to a machine shop, tool & die shop, etc. or know someone who does, there is a pretty good chance they can demagnetize it for You.
If You want to make a demagnetizer of Your own, take a long length of insulated single conductor wire and wind it into a coil big enough to pass the tool and Your hand through. Put this coil in series with a 100 watt light bulb [otherwise it would be a dead short]. Remove Your watch before You mess arround with this, it might not ruin it, but it won't do it any good. Energise the coil and pass the tool through the coil [keep it moving] several times turning it as You go. You should feel the 60 Hz vibration in the tool. Turn off the power when the tool IS NOT in the field. If You don't fully understand this description and are not somewhat experienced with electricity, You should not try this.