Agree with CJ. I go to Preferences | Drivers | ASIO buffer and set the slider to a low number (like 3) while tracking/recording to reduce latency. Then when mixing the final product, I move it back up to 6 or 7 to ensure there are no clicks or drop-outs. In the very near future, improved computing power and speed will eliminate this two-step process, but for now, I have found this to be a good method.
Also,the MIDI buffer, as said above, may be something else to check. The problem could be either or both, but having the ASIO buffer too high during recording is a sure fire way to have lag. Just don't forget to put it back.
I will say that, although I have noticeable latency problems with the wrong settings, an 1/8 note at 120 BPM is a LOT; however, it could be mechanical *and* human: it is hard to play in time when you don't hear yourself right. Some singers and musicians rush badly when latency is too high, but the reverse could be true as well.