Love story Chloe and horror title Inugmai - both from Japan - are understood to be competing at next month's Berlin International Film Festival as the line-up for the event's main competition section takes shape.

Chloe, directed by Go Riju and starring Masatoshi Nagase, is an adaptation of surrealistic novel Froth On The Daydream (L'Ecume Des Jours), by French poet and writer Boris Vian. Inugami, directed by Masato Harada and starring actress Yuki Amami, is adapted from a book by Masako Bando about a clan living for generations in the mountains of the Shikoku region, western Japan.

Japanese distributor Toho said it was the first time that two Japanese films had made the competition since 1982.

Rounding out a heavy Far Eastern presence in the competition are understood to be the first two productions from a partnership between France's Flach Pyramide and Taiwan-based Arc Light Films. The Bicycle, directed by China's Wang Xiao Shai, and Betelnut Beauty, by Taiwan's Lin Chen Sheng, are through an initiative unveiled at the AFM to make low-budget (around $600,000) films from hot young directors from the region.

Adding to the low-budget feel, $1.1m German-Greek co-production My Sweet Home is expected to secure a competition slot. The Berlin-set comedy, directed by Filippos Tsitos and starring Nadja Uhl and Harvey Friedmann, centres on a series of tragicomic stories around the stag and hen night of a young American and a German girl.

One talking point looks likely to be Catherine Breillat's A Ma Soeur (working title Fat Girl), the French director's follow-up to the controversial Romance. The portrayal of the troubled relationship of two sisters, which is being handled by Flach Pyramide, is understood to have a competition place.

Beefing up the French competition contingent are likely to be another two titles. Intimacy is directed by La Reine Margot's Patrice Chereau from a script by the UK's Hanif Kureishi, while Felix Et Lola is by Patrice Leconte, director of The Widow Of Saint-Pierre.

From the US, Sean Penn's The Pledge is expected to compete, while the UK has Michael Winterbottom's The Claim. Lasse Hallstrom's Chocolat is also expected to vie for the Golden Bear.

Algeria's foreign-language Oscar entry, Little Senegal, by Rachid Bouchareb, is also expected to screen, although one source said it may not end up in the main competition.

Previously reported as being in competition are titles such as Dogme film Italian For Beginners and two Italian entries - Malena and Ignorant Fairies.

Francoise Meaux Saint Marc in Paris and Martin Blaney in Berlin contributed to this report.