Leveling up your character grants 1 JP (Jutsu Point) and 1 SP (Skill Point).
Skill Points (SP) can be used in the [TAB] → [Progression] tab to increase your character's stats. More details about stats can be found in the Stats article.
Jutsu Points (JP) are used in the [TAB] → [Jutsu Tree] tab, where you can learn and upgrade techniques available to your character. At the start of the game, these are most often clan and elemental techniques. More details about techniques are described in the Techniques article.