Of the 21 animated films officially submitted for consideration to the Academy of Motion Picture Arts & Sciences, two are from Japan. One's from Studio Ghibli, which previously won a 2002 Oscar for Spirited Away. But the other submission is a source of some controversy.
First, the Ghibli submission, From Up on Poppy Hill. Adapted from the manga by Chizuru Takahashi (art) and Tetsurō Sayama (story), and directed by Ghibli head Hayao Miyazaki's son Gorō, it involves a girl in a boarding house who teams up with a member of the local school's newspaper club to save the building from being demolished. When released in Japan in 2011, it became the highest-grossing film of that year, earning over $60 million there.
The other film, The Mystical Laws, has drawn attention not for its storyline or animation but because it was financed and produced by a religious organization, Happy Science (Kōfuku no Kagaku). Happy Science has sponsored a number of other religiously-themed animated films in recent years, such as Hermes - Winds of Love and Rebirth of Buddha. None of them have been released on home video in English, and all of them have only played limited runs in big cities.
What's interesting about Laws is the pedigree of many of the people involved. Isamu Imakake, who worked on Cowboy Bebop, Neon Genesis Evangelion and Durarara!!, is directing the film, and art director Masaaki Kawaguchi provided scenery for Fullmetal Alchemist: Brotherhood.
Out of the 21 films submitted, five will contend for the Oscar. Last year eighteen films were in contention, but Japan did not have a submission for that year.