TOKYO (Reuters) - Japan's two newest stars have all the basics of being a pop idol down. Their dance moves are sharp, they sing without missing a beat, and their songs have made the top 10.

The only thing is, neither one of them exists.

The green-haired "Megpoid" and red-haired "Akikoloid" are both completely computer generated, the latest in a line of popular digital characters based on a voice-synthesizing program that allows users to create their own music.

They were the stars of a concert during the recent Digital Concept Expo in Tokyo.

Music made by "Vocaloid," the voice-synthesizing program, and its spin-off characters, has made it into the top 10 on Japan's weekly top hits list. But for those watching the concert, the performance was nothing more than thin air -- unless they looked at the screen showing the augmented reality (AR) scene with the 3D charactersinserted into live video.

The software used at the concert used a complicated system of sensors and motion capture technology to create the two singers, with sensors around the venue and on the cameras and the hands of two human back dancers interacting to make a composite that was inserted into the concert in real time.

Nothing about the singers is real. Even their high, perky voices are digitally generated, but sound no different from those of many a live Japanese pop singer.

"Though there have been a few concerts with the characters before, this is the first time they could interact with others, including the audience, and appear to move around in a true 3D space," saidMasaru Ishikawa, a Tokyo University researcher who helped create the system used for the concert.

"These sorts of concerts up to now have looked 3D but were actually using 2D technology. This is a world first in that the character is actually 3D and can sing and dance with others," he said.

Fans were able to get in on the action by using poles with markers that allowed them to be detected by the augmented reality system and interact with the characters by waving the poles around during the concert. Depending on the song, these movements produced stars, sparkles and flames in the video.

"Seeing the concert with augmented reality made it seem like they were really there, even though they weren't," 24-year-old fan Keisuke Shindo said after watching the hour-long concert.

"It was also interesting to see how they added the effects and allowed the audience to interact using the poles. I think it's pretty amazing."

In addition to the 150 fans at the actual concert, more than 65,000 people watched on Nico Nico Douga, a Japanese video-sharing site similar to YouTube.

(Writing by Elaine Lies; Editing by Paul Tait)