Woe unto the foolish soul who ventures to disagree publically and in writing, with an actual Japanese person with respect to matters Japanese. But I must disagree on this point.
I have only rarely seen a jgirl become overly leery at the prospect of holding hands in public, in Japan or in the U.S. Kissing in public still seems to carry some "taboo" baggage, but I've had it done to me. I am sure it depends on your company, but tasteful, minimal physical contact hasn't ever been a problem for me. Your mileage may vary.
After a while, you definitely get a "feel" for when physical content is appropriate and when it's not, at which point it no longer appears to be "shyness" per se, but rather social positioning. Some gaijin guys are annoying, and always want to hold hands and cuddle...these goofs never catch on because they equate physical contact with emotion.
But times are changing. Oscar is right, this is more the domain of the young than not, but I've seen older Japanese folks do it too, especially abroad. Just goes to show, it's the environment, and not the people, for the most part. It's never been that big of an issue for me or anyone I've dated. Perhaps Oscar's wife is a bit more traditional. Or maybe she's just hoping he'd wash his hands before coming home from work...who knows where those hands have been, doctor...!
...if ya know what I mean. Mooahahaha...
Seriously, I think the more urban the area, the less big of a deal it is.