The channel characteristics of modulating retro-reflector (MRR) free-space optical (FSO) link are studied by using wave-optics (WO) simulation method. The optical wave launched from the transceiver is reflected back in the same direction to the transceiver by the use of cube-corner reflector (CCR). This propagation process is divided into three parts: forward propagation through atmospheric turbulence, reflection of CCR, and backward propagation through the turbulence. For WO simulation under turbulence conditions, the split-step beam propagation method is implemented, and the influence of atmospheric turbulence along the propagation path is described by a set of random thin phase screens. The reflection effect of CCR is taken into account by using ray-tracing approach to calculate the intensity and phase of the optical field output from CCR. Integrating the reflection effect into WO simulations, we study the statistics of the intensity fluctuations in the forward, backward and double-pass links, and the correlation of fluctuations in the forward and backward links. The histograms of the normalized intensity for three links could be approximated by Gamma-Gamma (GG) distributions except for relatively large receiver apertures. There exists a relatively large correlation between the forward and backward links.