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In the final round of the Chuunin Exams, when the match between Neji and Naruto starts, Neji is surprised when Naruto uses Kage Bunshin no Jutsu. He had seen Naruto use the same technique in the match against Kiba in the preliminaries. So he should have known that they were solid clones that can fight unlike the clones created by the Bunshin no Jutsu.

Why was Neji surprised when he saw Naruto's shadow clones? Was Neji unaware of the Kage Bunshin Jutsu, which is a very popular jutsu used by the shinobi?

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I'm not sure if Neji was exactly surprised, or if it was more of a realisation of the how the technique worked and of its potential. But anyway, my take is that this is something like a "minor plot hole". I say this because although, as you said, Naruto performed this jutsu in his fight against Kiba, no one seemed to give any attention to it. In that fight, Naruto's accomplishment (somewhat) was the fact the he mastered the Henge no Jutsu.

In the beginning of the fight, Kiba remembers watching Naruto at the academy trying to perform Henge no Jutsu and completely failing it. Then, during the fight, Naruto is able to transform into Akamaru, and that seems to be the main focus of the battle. This flashback and transformation are shown in chapter 75, called "Naruto's Growth". In this chapter, although everyone sees the Kage Bunshin no Jutsu, only Shikamaru seems to notice that it is Kage Bunshin no Jutsu. He is the only one that makes a remark about the combination of this jutsu and the Henge no Jutsu. Plus, in this scene, Neji does not have his Byakugan activated, a relevant piece of information for the point I'm about to make.

Naruto's fight with Neji begins in chapter 100. In this chapter, Naruto begins by realising he cannot get near Neji to attack him, so he'll have to attack from a distance, and thus he creates some clones with Kage Bunshin no Jutsu. Here, this technique plays a central part in the actions about to occur, which is accentuated by the fact that shinobi in the audience (unlike what happened in Naruto's fight against Kiba) take notice of the fact that Naruto is able to use a Jounin level jutsu. Plus, here Neji has his Byakugan activated, which means he can see chakra flow and tenketsu and all that. Possibly, this was the first time he laid eyes upon such a technique with his Byakugan. I say this because, unlike what you say in your question, the Kage Bunshin no Jutsu is not such a popular technique, taking into account that it is a forbidden jutsu. It may be used often in the battlefield, but back then, Neji would probably never have seen it in action.

Neji's realisation that it is Kage Bunshin no Jutsu is used to make the reader understand (or to remind him, since I cannot recall if it was explained before) the difference between this jutsu and the Bunshin no Jutsu in terms of chakra flow and its physical properties. Also, strategically, the fact that Neji understands this is essential, which leads him to, after being surprised, state that "In the end, there's only one true body".

  • Kage Bunshin no Jutsu is a jonin level technique used for spying (We see it being used very often by kakashi and other jonins). It would be really suprising that genins are not even told about the technique. A guy who re discovers main branch's secret techniques cannot know about a jutsu like this is little hard to believe :) – kartshan Apr 23 '13 at 3:55
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    @kartshan I think the point is that Neji saw Naruto using a jutsu, he just didn't realize it was the Kage Bunshin Jutsu - after all, from Neji's perspective, Naruto's the class clown who managed to get this far entirely because his team was carried by the Uchiha. So what if the dope's picked up some random clone-spam jutsu from somewhere, he's still not particularly important. – Tacroy Apr 26 '13 at 22:55
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    another point, he was surprised he couldn't tell with his byakugan which was a clone and which the original, that was another element of surprise he tought he could by the flow of chacra diferentiate the "bunshin" from the original – xerido Jun 3 '15 at 10:38
  • @kartshan Kakashi can only do Kage Bunshin because he watched Naruto do it with his Sharingan, I don't recall any other jounin using it, only regular clones or their own specific element clones (mizu bunshin etc). Remember, it's a forbidden jutsu that Naruto learned from a scroll that was purposefully hidden by the third so that no one could learn it. – Kevin Dec 11 '16 at 16:54
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I think he was surprised to see Naruto's intellect that he had put equal chakra in each body so that Neji's eye cannot see the real one.

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Kage bunshin isnt a popular jutsu..its actually one of the lesser known jutsus because it requires high level of chakra and not everyone can do it..even most jonins dont prefer doing it unless they go on jnfiltration or spying mission.

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