First thing to work out is, is it running at 120+ when you are barrelling along an open road and the ambient temp is about 2 degrees? Or is it hitting 120 when the air temp is 45 and you are stuck in stop/start traffic?
In the former example the oil temp is probably too warm, in the latter, you're lucky, it should be reading 160++++!!
Don't forget that as it's an air cooled bike, when you are stationary the engine is not really able to cool down other than to transfer that heat to the surrounding air. Air that is still and hot itself (and trapped under the fairing) isn't going to take much heat off the engine. Once moving the air flow draws the heat off. The oil cooler does a reasonable amount when moving: effectively nothing when you are stationary.
IF it is 120+ when running free in cool ambient temperatures, then PERHAPS it is a little warm, and you could consider dropping down a heat grade in your spark plugs. Cooler plugs translate to cooler engines (to a degree). You should also check that it isn't running lean as a lean (not enough) gas problem will translate to hotter operating temps.