Direct-translating Kanji is actually kind of cool, in my mind. A lot of artists apply this use of English, and I think it is quite creative. For example, in Japanese (and other languages which use Chinese characters) a person can throw together somewhat random Kanji phonemes, and even though it is not an officially recognized word, the result can be understood. To take English phonemes (such as "distance" and "love") and do the same thing really makes you think outside the box, which I enjoy being made to do. Come to think of it, I am almost sure that this is how we got titles like Heartplace.

And as such, I am almost positive that 距愛 kyoai is not an actual Japanese word, anyway, so I'm sure it sounds just as strange to the Japanese ear as it does to us in English.

The ordinary term for long-distance romance is 長距離恋愛 choukyori ren'ai, by the way. It is entirely likely that 距愛 kyoai is an abbreviated form, possibly even thought-up by the creators of the movie.

Maybe a Chinese speaker on the boards could provide insight into whether or not 距愛 jù ài is a word in Chinese. It would be clever of the filmmakers to use a Chinese word for the title, because of its setting in Hong Kong, don't you think?