Before I started our MC125 also had 1mm squish with a new domed piston and it was very temperamental with jetting relative to air temperature. It had poor low end and ran ok WOT. With an accurate compression gauge it only made 150 psi.
Sorry I can not find my exact numbers, but as I recall I a) cut roughly 0.7mm off the head mating surface (to raise overall compression), b)corrected the squish angle to more closely match the domed piston angle and c) set the final squish for between 0.85mm to 0.9mm. The 125 engines can use a little less squish than the bigger bore bikes.
If your cylinder is in good shape with no ridge you can install a thinner base gasket which will lower the cylinder. Also make sure your head is correct for the flat top piston. What is the angle of your squish band?
Another easy option for an improvement is to advance the ignition timing a few degrees.
You need be careful with my suggestions because you are cutting down on your safety margins, so you need to listen for detonation and read your spark plug for accurate jetting and timing.
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