Thrawn said:

I agree that Nute Gunray and his race are totally based on Japanese people... I kept expecting to hear one of the exclaim "Oh, no, it's Godzilla!", while pointing out of a window. But Watto is NOT modeled after a Jewish person... he's the stereotypical Arabic bazaar owner... Middle Eastern accent, a five o'clock shadow, and he keeps women as slaves.

Animator Rob Coleman admitted he drew inspiration from Alec Guinness' Fagin in David Lean's Oliver Twist for Watto (A portrayal by Sir Alec that had the film banned in Israel - Rightly or wrongly... wrongly IMO).

I love Watto. Probably my favourite PT character (Probably beacuse he has some!), sure he does say he loves "Only money" and deal in slaves but you can tell he's a softie at heart.