Before I explain the timing, I want you to check the crankshaft bearing on the left side, (shifter side), of the bike. Just remove the left side case cover and then hold the magneto firmly in your hand and then lift up and down then left and right. If the magneto is not rock solid
you will need to install new crank bearings and seals. Any movement in the magneto means the timing will be jumping around.
Now, the timing. This bike is timed at 1.8mm BTC. Race timing is 2.0mm BTC.. You need a dial guage and an olmmeter to set it properly. Remove the spark plug then screw the dial gage mount into the spark plug hole. GENTLY run the piston towards TDC. At tdc setthe guage to zero then back the piston down, still on the compression stroke. Attach the olmmeter to the points and to ground. Run the pisten back towards TDC and set the points such that they open at the 1.8 or 2.0mm advance point. Setting the points is simply a matter of rotating the points base plate left or right as needed to achive opening at the proper piston position, 1.8 or 2.0..
There is a notch in the base plate which you can use to set the points. You can make the adjustment by loosning the base plate and useing a flat screwdriver to move the base plate. It has been 30 years since I worked on a 175 Yamaha. I dont recall if the magneto has a timing mark on it or not. I think it does. If so, the first of two marks is the timing mark. The second mark is TDC. You can start the bike then use a timing light to check the timing. Stop the engine, make an adjustment, start again and check with the timing light, etc., etc., until is is set where it should be. There will be a mark on the center case that the magneto marks will line up with if there are indeed marks on the magneto. It would probably be advisable to file the points as they may well be pitted from usage. Please rate my answer.