Balmung

Balmung is a sword. For every point of MP spent, the Balmung does 4% less damage.

Source
It can be found in the Steyliff Grove maze during Chapter 15. It can be sold to shops for 10,000 gil.

Trivia

 * Balmung is one translation of the name of a sword more often called Gramr (translated into English as "wrath"). According to Norse and Germanic mythos, Gramr was wielded by the hero Sigurd (or Siegfried), and he used it to kill the dragon Fafnir. The name "Balmung" appears in translations of the Germanic epic poem The Nibelungenlied.