A home-grown movie made a great opening for Australia's biggest film festival, writes Garry Maddox. Strange times at the Melbourne International Film Festival. As the rain pelted down on opening day, the State Government announced water restrictions. The conditions, which locals cheerfully described as "not so bad", were temporarily forgotten when the romantic drama Japanese Story opened the 52nd festival at the Concert Hall.

When it premiered at the Cannes Film Festival in May, director Sue Brooks's film sparked mutterings about a second Oscar nomination for Toni Collette. She plays a geologist reluctantly taking a Japanese businessman, played by Gotaro Tsunashima, on a mining tour of the remote Pilbara region in Western Australia. The film had been sold around the world, including in North America, before it was seen in its home country. That created a certain expectation about opening what has arguably become Australia's leading film festival. Japanese Story was given an enthusiastic reception by a black-tie audience that included Sigrid Thornton, Deborra-Lee Furness, Mick Molloy, Kamahl and Rachel Ward. They saw a performance by Collette that was the film's pulse. After emerging as a warm-hearted comic actress in Muriel's Wedding, she showed her dramatic range in The Boys, The Sixth Sense and more recently The Hours. But she is exceptional as Sandy in Japanese Story.

Sandy, who lives in Perth, smokes too much, heats baked beans for dinner and has a detached romantic life. To sell her company's software, she escorts the dapper businessman Hiromitsui into the desert. Culturally, they are polar opposites. She is direct, casual and knows nothing about the Japanese; he is polite, formal and uncomfortable around a Western woman. But a closeness develops between them. After an unexpected plot twist the drama becomes more intense and moving.

Brooks, who made Road to Nhill with the same team of producer Sue Maslin and writer Alison Tilson, shows a deft touch. She also captures the epic scale of the Pilbara with its huge mines and endless red-dust landscape. Japanese Story should find an appreciative audience when it opens in September, and Collette deserves those early rumbles about acting awards. For a first-timer, Melbourne's festival has one great advantage over Sydney's. It has five cinemas and a festival club within a few minutes' walk of each other.

That makes a densely packed program spanning 19 days possible and also means audiences can shift easily between cinemas. Many of the highlights of Sydney's festival, including the documentaries Spellbound, Amandla! and Bus 174, are also screening in the southern capital. The Melbourne festival's strength appears to be its strong Australian and South-East Asian programs. There are debuts for two additional local releases, The Rage in Placid Lake and Travelling Light, as well as screenings of The Honourable Wally Norman, A Cold Summer, Undead and four of the new crop of short features.

Director Gregor Jordan's first American film, Buffalo Soldiers, closes the festival, along with the Cannes prize-winning short Cracker Bag. Other offerings include Noah Taylor playing Hitler in Max, Rachael Blake and Sam Neill in the drama Perfect Strangers and Furness's first short, Standing Room Only, which stars Hugh Jackman, Michael Gambon and Joanna Lumley. The Asian selection includes strong representation from Japan, South Korea, Hong Kong and China, including a martial arts program called Fu Fighters.

There is also a retrospective on the Iranian director Abbas Kiarostami, who is a festival guest, a live improvised score for the silent classic Nosferatu and a program of sexually provocative French films. The executive director, James Hewison, sees the festival's shift from St Kilda to the city centre as leading to its flourishing health. "It seemed to happen at exactly the same time as the city was rediscovering its former glory," he said yesterday.

"Melbourne is not the most beautiful city in the world ... but over the last five to six years ... it has gone through this process of self-discovery." Hewison says the city's enthusiasm for film is shown by the way audiences queue in wintry conditions for 500 metres. After adding a new venue, at the Australian Centre for the Moving Image, the festival is targeting a 5 to 7 per cent increase on the 157,000 admissions last year. In comparison, Sydney's festival is estimated to have topped 100,000 admissions at its two venues this year.

But Hewison baulks at suggestions of competition between the festivals in Sydney, Melbourne and Brisbane, and the new Adelaide event every two years. "I'd love to see ... festival audiences going to all three. Or indeed every two years to Adelaide. I think that's a healthy thing that creates a very vibrant film culture," he says.