And that's because the speedo works from the rear wheel rotation sensor. So you can change the gearing all you want, it won't change the RWRS. A larger circumference rear tire will trick the speedo, making the bike go faster than the speedo thinks. Therefore since the speedo is naturally optimistic, a larger rear tire will render the speedo more accurate. A 130/90 or a 140/80 will do the trick.
The downside of the larger circumference rear tire is then the odometer will be pessimistic, or understating the mileage.
I've tested this with my bike.
One more thing...it does NOT affect the handling of the bike.