The standard form of a circle's equation is:
\[
(x - h)^2 + (y - k)^2 = r^2,
\]
where:
\( (h, k) \) denotes the center of the circle, and
\( r \) represents the radius.
Step 1: Identify given data.
The center of the circle is \( (5, 4) \), so we have \( h = 5 \) and \( k = 4 \).
Since the circle touches the \( Y \)-axis, the radius \( r \) is equal to the \( x \)-coordinate of the center, thus \( r = 5 \).
Step 2: Substitute values into the equation.
Using the center and radius, the equation of the circle is:
\[
(x - 5)^2 + (y - 4)^2 = 5^2.
\]
Step 3: Simplify the equation.
First, expand each binomial:
\[
(x - 5)^2 = x^2 - 10x + 25, \quad (y - 4)^2 = y^2 - 8y + 16.
\]
Now, add the terms:
\[
x^2 - 10x + 25 + y^2 - 8y + 16 = 25.
\]
Simplifying further:
\[
x^2 + y^2 - 10x - 8y + 16 = 0.
\]
Step 4: Check the corresponding option.
The resulting equation matches option \( \mathbf{(2)} \).
Final Answer:
The equation of the circle is:
\[
\boxed{x^2 + y^2 - 10x - 8y + 16 = 0}.
\]