diff --git a/java/java-impl/src/com/intellij/psi/formatter/java/JavaLineWrapPositionStrategy.java b/java/java-impl/src/com/intellij/psi/formatter/java/JavaLineWrapPositionStrategy.java
index 16c6c4a38f8b..5f0023a7d7ed 100644
--- a/java/java-impl/src/com/intellij/psi/formatter/java/JavaLineWrapPositionStrategy.java
+++ b/java/java-impl/src/com/intellij/psi/formatter/java/JavaLineWrapPositionStrategy.java
@@ -63,7 +63,14 @@ public class JavaLineWrapPositionStrategy extends DefaultLineWrapPositionStrateg
       searchEndOffset = Math.min(offset + 100, lineEndOffset);
     }
 
-    return CharArrayUtil.indexOf(sequence, tagStart, searchStartOffset, offset) > 0
-      && CharArrayUtil.indexOf(sequence, tagEnd, offset, searchEndOffset) > 0;
+    CharSequence textChunkAroundOffset = sequence.subSequence(searchStartOffset, searchEndOffset);
+    int offsetInChunk = offset - searchStartOffset;
+    
+    int tagStartIndex = CharArrayUtil.lastIndexOf(textChunkAroundOffset, tagStart, offsetInChunk);
+    if (tagStartIndex > 0) {
+      int nearestTagEndIndex = CharArrayUtil.indexOf(textChunkAroundOffset, tagEnd, tagStartIndex);
+      return nearestTagEndIndex > offsetInChunk;
+    }
+    return false;
   }
 }
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaWrapOnTypingTest.java b/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaWrapOnTypingTest.java
new file mode 100644
index 000000000000..2472dfa5a97b
--- /dev/null
+++ b/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaWrapOnTypingTest.java
@@ -0,0 +1,54 @@
+/*
+ * Copyright 2000-2015 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package com.intellij.psi.formatter.java;
+
+import com.intellij.ide.highlighter.JavaFileType;
+import com.intellij.testFramework.fixtures.LightCodeInsightFixtureTestCase;
+
+public class JavaWrapOnTypingTest extends LightCodeInsightFixtureTestCase {
+
+
+  public void testWrapInsideTags() {
+    myFixture.configureByText(JavaFileType.INSTANCE,
+      "public class Hw {\n"                                                                                                      +
+      "\n"                                                                                                                       +
+      "    /**\n"                                                                                                                +
+      "     * @return index for the given relative path. Never {@code null}, but returned index may not exist (in which case,\n" +
+      "     *\n"                                                                                                                 +
+      "     * {@link Index#exists()} returns {@code false}). If the index do not exist, it may or may not be read-only (see <caret>)\n" +
+      "     */\n"                                                                                                                +
+      "    public static void test() {\n"                                                                                        +
+      "    }\n"                                                                                                                  +
+      "}\n");
+
+    myFixture.getEditor().getSettings().setWrapWhenTypingReachesRightMargin(true);
+    
+    myFixture.type('{');
+    myFixture.type('@');
+    
+    myFixture.checkResult("public class Hw {\n"                                                                                  +
+      "\n"                                                                                                                       +
+      "    /**\n"                                                                                                                +
+      "     * @return index for the given relative path. Never {@code null}, but returned index may not exist (in which case,\n" +
+      "     *\n"                                                                                                                 +
+      "     * {@link Index#exists()} returns {@code false}). If the index do not exist, it may or may not be read-only (see \n" +
+      "     * {@<caret>})\n" +
+      "     */\n"                                                                                                                +
+      "    public static void test() {\n"                                                                                        +
+      "    }\n"                                                                                                                  +
+      "}\n");
+  }
+}