If you have a save file before you reach Yojimbo, I suggest you reload it. Pick his third option, which is something along the lines of "To defeat the strongest monsters". He'll perform Zanmato much more easily against higher resistant monsters, and for less money as well. I'm going to assume that you have the PAL or International version as you seem to think that a measly 100,000 Gil is a lot to dish out for Zanmato.