Police Region 1 acting commissioner Amnuay Nimmano said Somchai Kaewbangyang confessed to the murder during questioning.
Pol Maj Gen Amnuay said Mr Somchai earlier denied killing the man but admitted he dismembered the body to cover up the death after he found him at the house of Pornchanok Chaiyapa, his girlfriend, another suspect in the murder.
He said Ms Pornchanok also admitted she witnessed the killing and gave some useful information, but declined to give further details.
A source close to the investigation said Mr Somchai admitted to smothering the man to death with a pillow.
The confession comes as police yesterday (October 24) found knives and other items believed to be connected to the murder at the home of the suspects' daughter.
Pol Maj Gen Amnuay said police expect to wrap up the investigation in 15 days.
Pol Col Somsakchai Amornsongcharoen, chief of Bang Sao Thong police station, said Mr Somchai told investigators about the murder weapons during questioning on Thursday (October 23) night.
He said police obtained a warrant from Samut Prakan provincial court to conduct a search at the flat in Samut Prakan's Bang Phli district. Officers found the knives allegedly used to chop up the victim and the clothes Mr Somchai wore on that day.
The flat belongs to Mr Somchai's 24-year-old daughter born to Ms Pornchanok. Forensic tests would be carried out to see if the knives were used in the crime.
The pair were arrested in Ang Thong on Sunday (October 19) on suspicion of being linked to Shimato's disappearance. The 79-year-old teacher was last seen on September 21. His son, Tetsuo Shimato, flew from Japan and lodged a missing persons complaint with Huai Khwang police on October 14.
Police found several suspicious withdrawals from the missing man's bank account, with a total of more than B700,000 taken out in 14 transactions. Ms Pornchanok was charged with theft.
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