Andy Murray has been knocked out of the Australian Open in the second round by Japanese qualifier Taro Daniel.

The three-time Grand Slam winner went down in straight sets to the world number 120, who stormed to a 6-4 6-4 6-4 victory in front of the raucous crowd.

"It's amazing, winning a match like this here with the crowd is unbelievable. Amazing level from me - I was cramping a little bid in the beginning of the third," Daniel said during his on-court interview.

"I tried to not make too big a deal out of this match - it's just another match at the end of the day. I was trying to feel the [crowd's] energy within my body - I had goosebumps a couple of times in the match, it was amazing."

Multiple unforced errors proved costly for Murray in the first set, as Daniel stormed to a 6-4 win with an ace before Murray failed to capitalise on an early break point in the second set.

Murray's serve was broken in game three of the second set as his 28-year-old opponent gained the upper hand, with Daniel taking the second set with a faultless final game.

However, the Japanese qualifier found himself 2-0 down in the third set following a rare double fault, but Murray also cursed his serve as Daniel broke straight back before serving for the match.

Daniel's subtle backhand ultimately settled the contest in his favour, and he will now meet either Jannik Skinner or Steve Johnson in round three.