Saito said he was shocked by the test results, insisting he had never taken a steroid and there was no need for him to use a masking agent.
Saito was tested after training on February 4, as he was preparing for bed in the Athletes' Village in Gangneung, according to the Japanese Olympic Committee.
"I do understand athletes should not do any doping and even unintentionally".
The Japanese skater is the first athlete to fail a drugs test at the Games, and it comes after renewed scrutiny by the International Olympic Committee following the discovery that Russian Federation enacted state-sponsored doping four years ago at Sochi 2014.
Japan's chef de mission Yasuo Saito said that Kei Saito had a doping test at a January 29 training camp for the Games and had tested negative.
It only took a few days to reveal the first positive doping test of the Winter Olympics.
Kei Saito is a reserve member of Japan's 5,000 meter relay team.
The IOC and anti-doping authorities have stepped up testing for the Pyeongchang Games following revelations of a state-sponsored doping scheme at the last Winter Olympics in Sochi, Russia in 2014.
"I am extremely shocked by the test results that have come back", Saito said in a statement, according to Kyodo News.
Saito was summoned before a CAS tribunal yesterday following the positive tests for acetazolamide, a medication used to treat complaints ranging from epilepsy to heart failure.
However, according to CAS, no results from the Games have been affected by the violation. "That is why we had to go with the provisional measure".
Tsutomu Kawasaki, Japan's short track speed skating head coach, added: "Obviously we are surprised and it is a disappointment for the team".
Team Japan officials said Saito was tested hours after arriving in the athletes' village on Feb 4.
The 21-year-old first time Olympian is a biology student at Kanagawa University.