The Swiss won 6-3, 6-2 and now he can qualify for the semifinals post defeating Andy Murray in his final Group B match. Murray beat Milos Raonic in straight sets to keep his hopes in the tournament alive.
Had Murray lost, Federer would have automatically qualified for the semifinals.
The world number two wanted to qualify for the semifinals on Tuesday itself but Raonic failed to secure a straight sets win over Murray and the Briton did not even prevail in three sets, The BBC reported.
In light of his performance against Nishikori, Federer said that the Japanese has shown in the past that when he gets the upper hand against any player from the baseline, he's very difficult to beat.
The Swiss said that Nishikori could not get it done for some reason on Tuesday, adding that maybe he was playing too well on defence and offence, mixing up his serve good enough.
But, Federer admitted that he knows Nishikori can play better.
Nishikori, meanwhile, remains very much alive in the tournament following his opening win over Murray, the report added.