Ito, finalist at a Challenger event a fortnight ago in Turkey, showed no fear as he imposed his game on the Swiss world number four, who won the Australian Open in January.
US Open finalist and last week's Kuala Lumpur ATP winner Nishikori is seeded fourth at the home event he won in 2012 and opens his singles campaign on Wednesday.
Wawrinka stands next in the queue to qualify as fourth man into the eight-player World Tour Finals in London in November.
The Lausanne native was puzzling through what went wrong with his game in the 79-minute loss, which will make him wait another week to likely enter the year-end field, at the Shanghai Open.
"It was certainly not a good day at the office," he said.
"I'm not happy about the result," said Wawrinka, who smashed a racquet in his frustration on court.
"I have to see what is wrong and try to change it before Shanghai," he said.
Wawrink felt it was a bad match from his side.
"I felt slow on the court and was not moving well," he said.
"It's tough to say exactly what went wrong."
Wawrinka said he had seen Ito play and knew his game.
"I allowed him to play aggressively and he had a good match," he said.
"It's tough to say what happened to me but I have to work it out and make corrections before Shanghai."
Wawrinka said he was not worried about his London position — only the state of his game two weeks after helping his nation into the Davis Cup final against France.
"I'm not worried about qualifying, I just need to start winning some matches," he said.
"It's a long season and we all are a bit tired.
"I was feeling OK, I don't know why I played this poorly."