It's used to craft a Munechika Sword, which requires port level 49. The sword deals an extra 20% damage, and an additional 10% if the target is infantry or if damage is less than 20% of the targets max troops. Crafting it also requires two items that, as best as I can tell, are not yet in the game. There's also a 500 soul fee to craft the sword, so even if you had the components, you might not want to.
And for all of that, the sword isn't even all that great. It's high enough level to be endgame caliber, certainly. But I don't see any good reason to use it over both a water gun and a cursed nameless sword.