diff --git a/java/java-psi-impl/src/com/intellij/codeInsight/folding/impl/JavaFoldingBuilderBase.java b/java/java-psi-impl/src/com/intellij/codeInsight/folding/impl/JavaFoldingBuilderBase.java
index e165ba718467..b88cc90e4b74 100644
--- a/java/java-psi-impl/src/com/intellij/codeInsight/folding/impl/JavaFoldingBuilderBase.java
+++ b/java/java-psi-impl/src/com/intellij/codeInsight/folding/impl/JavaFoldingBuilderBase.java
@@ -48,6 +48,7 @@ import com.intellij.psi.util.PsiUtilCore;
 import com.intellij.util.Function;
 import com.intellij.util.ObjectUtils;
 import com.intellij.util.text.CharArrayUtil;
+import org.jetbrains.annotations.Contract;
 import org.jetbrains.annotations.NonNls;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
@@ -703,7 +704,7 @@ public abstract class JavaFoldingBuilderBase extends CustomFoldingBuilder implem
     else if (element instanceof PsiComment) {
       return settings.isCollapseEndOfLineComments();
     }
-    else if (element instanceof PsiLiteralExpression
+    else if (isLiteralExpression(element)
              && element.getParent() instanceof PsiExpressionList
              && (element.getParent().getParent() instanceof PsiCallExpression
                  || element.getParent().getParent() instanceof PsiAnonymousClass)) {
@@ -775,7 +776,7 @@ public abstract class JavaFoldingBuilderBase extends CustomFoldingBuilder implem
       for (int i = 0; i < callArguments.length; i++) {
         PsiExpression callArgument = callArguments[i];
 
-        if (callArgument instanceof PsiLiteralExpression) {
+        if (isLiteralExpression(callArgument)) {
           if (!isResolved) {
             PsiMethod method = expression.resolveMethod();
             isResolved = true;
@@ -799,6 +800,20 @@ public abstract class JavaFoldingBuilderBase extends CustomFoldingBuilder implem
     }
   }
 
+  @Contract("null -> false")
+  private static boolean isLiteralExpression(@Nullable PsiElement callArgument) {
+    if (callArgument instanceof PsiLiteralExpression)
+      return true;
+
+    if (callArgument instanceof PsiPrefixExpression) {
+      PsiPrefixExpression expr = (PsiPrefixExpression)callArgument;
+      IElementType tokenType = expr.getOperationTokenType();
+      return JavaTokenType.MINUS.equals(tokenType) && expr.getOperand() instanceof PsiLiteralExpression;
+    }
+
+    return false;
+  }
+
   private boolean addClosureFolding(final PsiClass aClass, final Document document, final List<FoldingDescriptor> foldElements,
                                     @NotNull Set<PsiElement> processedComments, final boolean quick) {
     if (!JavaCodeFoldingSettings.getInstance().isCollapseLambdas()) {
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/folding/JavaFoldingTest.groovy b/java/java-tests/testSrc/com/intellij/codeInsight/folding/JavaFoldingTest.groovy
index c68fb5a7cc43..78629192782f 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/folding/JavaFoldingTest.groovy
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/folding/JavaFoldingTest.groovy
@@ -698,6 +698,29 @@ public class CharSymbol {
     assert regions[2].placeholderText == "fast: false"
   }
 
+  public void "test inline negative numbers (IDEA-126753)"() {
+    def text = """
+public class CharSymbol {
+
+  public void main() {
+    Object obj = new Object();
+    count(-1, obj);
+  }
+
+  public void count(int test, Object obj) {
+    Object tmp = obj;
+    boolean isFast = false;
+  }
+}
+"""
+    configure text
+    def regions = myFixture.editor.foldingModel.allFoldRegions.sort { it.startOffset }
+    assert regions.size() == 3
+
+    checkRangeOffsetByPositionInText(regions[1], text, "-1")
+    assert regions[1].placeholderText == "test: -1"
+  }
+
   public void "test inline constructor literal arguments names"() {
     def text = """
 public class Test {