It's the peak travel period in Japan too.
Warning NYE is not what I'd call a 'festive' event in Japan (as in a party celebration) - it's more solemn with many people going to Buddhist temples for the close of the year - where the bell tolls slowly 108 times. Many also visit shinto shrines to greet the new year. Popular sites attract huge but well controlled crowds.
Close to the airport is Narita-san - a very famous, historic temple and one of the major places in Japan at New Year (millions visit the temple over the 3 day national holiday at NY.) The other major place is Meiji Jingu the shrine in Harajuku with zillions braving the crush.
Everyone else will at home with the family watching a variety show on tv & slurping soba.
Amongst some foreign residents & certain Tokyoites you'll probably be able to find non-indigenous style partying somewhere if that's what you are after.