Kanji just wants to be loved no matter what. Naoto showed him attention and it gave him the sense that he really liked naoto. Naoto looking like a boy and his feeling towards her made him question his sexuality with all the non-manly things he does (like knitting stuffed animals) which ultimately turned his eyes towards possibly being gay.
Kanji isn't gay. It could be closer to say he is bi but he never showed interest in any male in the series just naoto. He showed interest in both Yukiko and Chie (the nose-bleeding scene) so in terms of actual male/female interest that 0 males, and 3 females. He also in his social link SPOILERS >> showed why girls scared him when he was younger<<.
With that said I came to the conclusion that Kanji isn't gay or bi he just needs love and has non-manly hobbies that got him picked on when he was young. People can think he's gay or bi if they want to but I never found hard evidence that kanji was honestly bi and besides his questionable bathhouse zone, nothing to call him full blown gay.
PSN: JArcane -- XBL: ArcShawdow Currently Playing: RE6(360) Dark Souls(360)UMVC3(360) SSF4:AE(360) TTT2(PS3)
I honestly think Kanji's pansexual--he's attracted more to people rather than gender, as evidenced by Naoto:
He finds himself intrigued and interested in Naoto when he believes she is male. When it's revealed she's not, he's relieved--although he has some other suggestive moments throughout P4G and P4A with the male characters--but still has his crush on her. He is interested in her regardless of his perception of her gender.
Beyond the Joystick - game reviews, plot recaps, and more http://beyond-the-joystick.blogspot.com
He's bi, though not in the true sense of the word. He really seems to have no preference, but obviously has a sex drive from some of the mishaps he goes through.
He bases his attraction on who he sees might be attracted to him (like when he mistakenly thought Naoto was "interested" in him. That alone created feelings for Naoto). Whether he turned out to be a she or not really didn't matter. She's basically genderless to him.