Saito, who had not yet competed, was provisionally suspended after testing positive for masking agent Acetazolamide, CAS said, adding that a final ruling would be issued after the Games.
Masking agents are often used to cover up banned performance-enhancing substances.
The 21-year-old was due to compete in the men’s 5,000m relay on Tuesday.
This is the first doping case during the testing period of the Olympics in South Korea and comes as Tokyo prepares to host the Summer Games in 2020.
CAS said: “The athlete accepted on a voluntary basis to be provisionally suspended and to leave the Olympic village.
“As a consequence, 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.”
Doping cases are rare among Japanese athletes and this is the first for the country at a Winter Olympics.
Last month, however, sprint canoeist Yasuhiro Suzuki admitted to spiking a rival’s drink with an anabolic steroid to scuttle his Olympic dream and was banned for eight years.
He now faces a lifetime ban from the Japan canoe federation.
The 45 Russians were denied invitations to the Olympics because of evidence linking them to past doping had their case heard on Wednesday by the Court of Arbitration for Sport (CAS).
The group included cross-country skiing gold medalist Alexander Legkov and skeleton gold medallist Alexander Tretiakov.
The group of 32 athletes includes six-time Olympic gold medallist Viktor Ahn, three former NHL players, and world biathlon champion Anton Shipulin.
Mr Shipulin said: “While CAS is sitting today and considering us, I’m out training. I’m not giving up and I’m hoping for a positive result.
“Today I’m skiing with my phone and after each lap, I’m checking to see if I’ve got my dream SMS.”
The games will still include 168 Russians who have been invited as “Olympic Athletes from Russia”, competing in neutral uniforms under the Olympic flag.
The court said in a statement: “In its decisions, the CAS arbitrators have considered that the process created by the IOC to establish an invitation list of Russian athletes to compete as Olympic Athletes from Russia (OAR) could not be described as a sanction but rather as an eligibility decision.”
Russia is nominally barred from the Winter Olympics because of its state-backed doping programme in the last Winter Games.
Olympics officials first learned about Russia’s state-backed doping programme in May 2016.