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I'd also reccomend Tetsuo II: Bodyhammer directed by Tsukamoto Shinya.
Then there's a great disk out on Criterion "Kwaidan" which is a collection of short horror films based on a book by a greek born author who moved to Japan and all but became Japanese himself.
Japanese horror is great and there's deffinitely a push to get it remade or released here in the states. Probably because all American horror movies have been pretty horrible lately.
Just remember that just like anything else there are awful Japanese horror movies. So don't expect it to be amazing just because it's from Japan.
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