Over the next few days, Susan moved towards the southwest and continued to intensify before it reached its peak intensity as a category five tropical cyclone during January 5 while it was located about 400 km (250 mi) to the northwest of Vanuatu's capital city Port Vila.

Despite sparing Vanuatu and Fiji direct hits, heavy rain and gale-force winds associated with Susan were reported to have caused minor damage to several Vanuatuan and Fijian islands.

During December 20, 1997, the Fiji Meteorological Service (FMS) started to monitor a weak tropical disturbance, that was located about 915 km (570 mi) to the northwest of Pago-Pago in American Samoa.

[1] During the opening days of January 1998, a subtropical mid-level ridge of high pressure developed inbetween Fiji and Vanuatu to the south of the system, which provided an area of low vertical wind shear for the disturbance to intensify in.

[2][5] It was classified as a category 3 severe tropical cyclone during January 4, as an eye appeared on satellite imagery, atmospheric convection increased and clouds tops significantly cooled.

[2] As it peaked in intensity, Susan was located about 415 km (260 mi) to the northeast of Port Vila in Vanuatu and had started to recurve by 70 degrees towards a large weakness in the subtropical ridge.

[18][19] After Susan had been named on January 3, the FMS started to issue special weather bulletins for Vanuatu, which indicated that gale-force winds might impact the northern islands within the next 24-48 hours.

[14][22][23] After the alerts were cancelled on January 7, by the National Disaster Management Council, most shops and government buildings on Efate island kept their shutters up because Cyclone Katrina was predicted to directly affect the archipelago within a few days.

[5] Early the next day as squally strong north to north-easterly winds were starting to affect Fiji, the FMS upgraded the alert to a gale warning for Vatulele, Kadavu, western and south-western Viti Levu and the Yasawa and Mamanuca island groups.