Later Tuesday, the Anti-Doping Division of the Court of Arbitration for Sport (CAS) released information on the test, citing acetalozamide as the illegal substance.
He was provisionally suspended and voluntarily agreed to leave the Olympic Village on Tuesday.
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.
It is the first registered case to CAS by the International Olympic Committee at these games. The following evening, the International Olympic Committee notified the JOC the B sample also came back positive.
According to several reports, 21-year-old Japanese speed skater Kei Saito failed a doping test.
A masking agent is a diuretic that serves to hide the presence of other banned substances and also helps athletes to lose weight quickly, The Guardian reported.
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Team chief Yasuo Saito said the athlete had also been tested at a training camp on January 29 on the order of the International Skating Union (ISU) and his test was negative.
"The only way I could have this substance in my system is that I took it unknowingly, that it happened by accident".
"So I have no motivation to use this".
The athlete was "surprised and dismayed" by the outcome of the drugs test, he said. "So it is beyond my comprehension how his samples can test positive", Tsotomu Kawasaki said at a news conference. "That is why we had to go with the provisional measure".
CAS' statement read: "For the second time in the history of the Olympic Games after Rio 2016, the CAS is in charge of doping-related matters arising on the occasion of the games as a first-instance authority".
"As a outcome, the athlete is provisionally suspended from competing at the Pyeongchang 2018 (Olympic Games) and at any future ISU (International Skating Union) competition pending the resolution of this matter".
The International Olympic Committee (IOC) banned Russian Federation from Pyeongchang after a massive doping scandal during the Sochi Games.