To beat the final boss/Masked Man/Claus you really want these...

~ Lifeup Beta & Gamma, Refresh, HP and PP recovery items, Mementos, at least 300 HP & 250 PP

You DON'T want these...

~ Healing Gamma and Omega, incapacitation recovery items, Shield/PSI Shield/PSI Counter Alpha & Omega

Q: Why shouldn't I recover my party with items/PSI?

A: MM's lightning will just KO them again AND he still gets to attack you.

Q: Why shouldn't I use a shield/counter?

A: Because they both count as shields and are removable by the Shield Killer. Plus it's a waste of PSI.

Strategy:

Do not attack. Claus will go twice in a turn. His attacks do 100/80 damage. That's about 180 HP damage per turn!!! Lifeup Beta only restores 120 HP. Keep guarding until you run out of mementos.then every turn use Lifeup Beta or a HP/PP recovery item. If you take mortal damage use Lifeup Gamma or a HP Recovery item. You'll hear Hinawa's voice about 3 times before Claus uses PK Love Omega, dealing 600 damage. Flint jumps in and takes it. You can harm Claus now but Hinawa will just tell you to stop fighting. The other PK Loves Claus fires will hit you. Listen to Hinawa's voice about 5 more times and Phase 2 will begin after the cutscene.

Phase 2 consists of Claus going once per turn and doing a WHOPPING 20 HP DAMAGE! You can harm Claus again but it really doesn't matter.

After about 7 turns of Claus gazing at you, Hinawa's voice convinces Claus to take of his mask. He fires one final thunderbolt at you, so that the Franklin Badge reflects it and does mortal damage to Claus.

The battle then ends. Congrats, you beat the final boss!