In 1945, General Douglas MacArthur included Watanabe as number 23 on his list of the 40 most wanted war Criminals in Japan.

However, Watanabe went into hiding and was never prosecuted. In 1952, all charges were dropped. In 1956, the Japanese literary magazine Bungeishunjū published an interview with Watanabe entitled "I do not want to be judged by America." He later became an insurance salesman, and grew wealthy.

Prior to the 1998 Winter Olympics in Nagano, the CBS News program 60 Minutes interviewed Watanabe at the Hotel Okura in Tokyo as part of a feature on Louis Zamperini who, four days before his 81st birthday, was returning to carry the Olympic Flame torch through Naoetsu en route to Nagano, not far from the POW camp where he had been held. In the interview, Watanabe acknowledged beating and kicking prisoners, but was unrepentant, saying, "I treated the prisoners strictly as enemies of Japan." Zamperini attempted to meet with his chief and most brutal tormentor, but Watanabe, who had evaded prosecution as a war Criminal, refused to see him.

Recounts of Watanabe's abusive behavior are told in Laura Hillenbrand's book about Zamperini titled Unbroken: A World War II Story of Survival, Resilience, and Redemption (2010). Watanabe also appears in Dr. Alfred A. Weinstein's memoir, Barbed Wire Surgeon, published in 1948. In 2014, Japanese musician Miyavi played Watanabe in Angelina Jolie's Unbroken, the film adaptation of Hillenbrand's book.