On later models an intake air temperature sensor was located in the cover under the radiator/intercooler. Two wire connector. Can't remember if this is applicable to your '95.

Did you get this code off of the OBD I under the hood? If so which socket did you get the reading from? According to Haynes' code listings, only the Fenix ignition system uses the 122 code. The Haynes manual also mentions that the IAT only shows on non turbo models. I believe that all 1995 850's have the Motronic 4.3 ignition system which does not show a code for IAT. I also believe the MAF(mass air flow sensor) provides the ECU with the intake temperature info as needed. I just looked in my air cleaner housing and I don't see an IAT. I also have a 95 850 Turbo. The Haynes Volvo 850 manual has proven to be worth it's weight in gold and the Chilton Volvo Cupes / Sedans / Wagons(now published by Haynes) has been a little less helpful but still useful.
Good luck and let me know how you do.