THE Australian dollar has closed 2.15 per cent down, amid lowered demand for risk-sentiment currencies.

Weaker commodity prices and a decision by Japan's central bank to cut interest rates contributed to the drop in demand.

At 5 pm (AEDT), the Australian dollar was trading at 67.13 US cents, down from yesterday's close of 68.62.

During the day, the local currency traded between 66.10 US cents and 67.60.

AAP