User blog comment:Pacifista15/Explosive Punches/@comment-4493594-20111028091954

If liquids are heated up too quickly they "explode" due to the rapid increase of volume when they evaporate. Which must mean that Luffy's punch is hot enough to get salt water to boil. (Maybe Sanji can use him as a cooker from now on. lol)

But to be able to produce "steam" under water... either the heat from Luffy's punch is enough to separate the hydrogen from the oxygen molecules (because Luffy is magic) or the water around Fishman Island has properties different from ordinary sea water or it's just the oxygen Luffy's body breathes out naturally.