The light has traveled for 120 million years, but the galaxy today is further away because the universe has been expanding the entire time. So the distance between the position of the object 120 million years ago, and Earth today, is 120 million light years. I think :)
It's not just objects getting more and more distant with time, it's spacetime itself stretching at every point.
So, during it's 120M years journey, the photon had to travel the initial distance + new distance added by expansion rate.
So when the photons we are receiving now left that star, that star was closer than 120M light years away. And that star is now further than 120M light years.