I think “soft wrap” might be what you’re after. It’s read-only, i.e. does not change the characters in the file, it only wraps what you see on screen.
Intellij >= 14.1.4: As pointed out by looper in the comments, the options are under File > Settings > Editor > General – under the Virtual Space or Soft Wraps sub-group.
Intellij < 14.1.4: Look under File > Settings > Editor > Virtual Space.
It doesn’t have a shortcut by default, but you can assign one in the keymap.
AndroidStudio >= 1.4.1: the options are under File > Settings > Editor > General – under the Soft Wraps sub-group.
You can also right click the gutter (the vertical bar where line number is shown) and select “Use Soft wraps” – thanks to Bajal for comment.
To assign a shortcut for toggling softwrap: Look under File > Settings > Keymap, search for “softwrap”, then assign your preferred shortcut.