When Japanese people compliment your physical appearance, they generally say something like You're cute, or You're pretty. Which is very different than Americans, it would be a bit awkward for us to make such a bold compliment, we instead say, that dress looks beautiful on you, or I really like your T-Shirt. When Americans receive a compliment, they say Thank you, plain and simple. In Japan you are suppose to negate the compliment in some way, it can be anything from responding to you're pretty with but I'm really stupid, or it could be just a simple nuh-uh.
If you go to someone's house in Japan, be really careful about compliments. If you compliment something in their house, unless it's bigger then your head, they will probably give it to you! This sounds ridiculous, and I didn't believe people when I first came to Japan, but people will give you anything they can. They will always say that the thing is of no consequence to them, and will even usually wrap it up nicely for you. I feel really awkward when this happens, as with any gift I receive in Japan, I try to refuse it 3 times, but I usually cannot convince them that I don't actually want it, I just noticed it and thought it was nice. Gift giving is a huge part of Japanese culture, and it is very difficult to know what to do, and quickly becomes very expensive, because generally for every gift you receive, you are expected to give one, of equal or greater quality, in return. When I go to someone's home, I am very cautious to only complement the house in general you have a beautiful home, or compliment the food. You can never compliment Japanese food enough, and I have found that a huge portion of most meals is spent complimenting and showing appreciation of the delicious food you are enjoying.