the blade looks flat
...a katana blade IS flat.

But, yes, the blade's shading does need some work. You should make the highlight's and shadows follow the blades form, like in bengoshia's edit. The shine's of a metal are from the light from surrounding objects being intensely reflected off of the metal's surface. The blade's planes would reflect the light off of themselves in the appropriate directions not randomly be highlighted in repeated fashions.
I feel the handle would look great with some more contrast.