The Daikatana in the GBC version of the game functions somewhat differently than in the other versions. The Daikatana is a rapid fire sword that knocks enemies back one square. Holding the attack button will make the Daikatana flash and it will fire a short range projectile, very useful when low on ammo.
Unlike the 64 and PC versions of the game, the Daikatana will not power up upon killing an enemy.
The Daikatana is wielded by Hiro Miyamoto and Kage Mishima, who retrieved it in Mt. Fuji.
Using the Daikatana you can utilize the enemy bumping ability throughout the game, which proves to be very useful.