Generally speaking magnetism won't damage a watch's components, but a large dose can put extra stress on parts and could potentially distort them. ... By far the most efficient way to demagnetise a watch is with a demagnetising machine.

Is it safe to demagnetize a watch?

Luckily, unless the magnetic force is of an unusally high level, the effect magnetism have on a watch is usually reversible. A magnetized watch demagnetized should have its function return to normal conditions.

Can a magnet damage a watch battery?

The magnets that are stored next to lithium batteries do not adversely affect them. Of course, if you have watch batteries that contain iron, as a rule of thumb, the batteries will congregate around any magnet (if the batteries are exposed to the magnets).