Not since his debut in 2008, when the tournament was held in Shanghai, has the Scot won both of his opening two matches.
Murray was ultimately comfortable in beating Marin Cilic in his first match at the O2 Arena on Monday and would more than likely secure a spot in the semi-finals with victory over Nishikori.
This will be a fourth meeting of the year between the pair, with Murray having won easily at the Olympics but enduring long five-set tussles with Nishikori in the Davis Cup and at the US Open.
He came out second best in New York at the end of a draining summer and knows Nishikori, who beat Stan Wawrinka 6-2 6-3 on Monday, represents a big threat.
The Scot said: "To win against a player like Stan with that scoreline, I don't think Stan had really any chances on Kei's serve either. He obviously must have played very well.
"I would say this is probably his best year that he's had on the tour. He's one of the best players in the world. He's been playing very well, the last few months especially."
Nishikori, who could yet finish the year ranked number three, described March's Davis Cup clash with Murray as a key moment in his season.
The 26-year-old, who also won their only previous match here, fought back from two sets to love down to level the rubber in the first-round tie before Murray edged the fifth.
He said: "That Davis Cup match was one of the turning points for me. I lost the match but I thought I played a great match against Andy. Usually I don't feel much chance to win, but I almost beat him.
"At the US Open I managed to beat Andy for the second time. It was a great experience and it gave me great confidence. I learned a lot of things from those two tournaments."
Murray must out-perform Novak Djokovic this week to hold onto the world number one ranking, and he is playing catch-up after his rival defeated Milos Raonic 7-6 (8/6) 7-6 (7/5) to book his place in the last four.
Djokovic was again unconvincing at times, twice letting a break slip away in the second set, but he showed his mettle when it mattered to make it just one match lost from his last 21 at the O2 Arena.
Raonic and Dominic Thiem, who beat Gael Monfils, will battle it out for the second semi-final spot on Thursday.
Jamie Murray and Bruno Soares recorded their second win of the doubles tournament in impressive fashion against Bob and Mike Bryan but still need a set against Marcelo Melo and Ivan Dodig on Thursday to be sure of a place in the last four.
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