When I'm on the subway in Japan it really is difficult to figure out where to look.  Maybe it's because I'm a tall black man but I don't want to freak Japanese people out if I stare in their direction.  Usually I just look up at the ads on the walls of the train or out of the window.  Of course, plenty of people stare at me because I'm the big foreigner that they can't help but see.  I will admit that when the train is packed with people, I do pretend to be taking a nap to avoid the awkward closeness.