Assuming a circle of radius r which touches both the axis is given by, (x−r)2+(y−r)2=r2
Now given line x+y=2 makes the intercept 2 the circle, so plotting the diagram we get,

Now from diagram,
AC=BC=1,OC=r2−1
Now using the formula of perpendicular distance of point from the line we get,
OC=∣22r−2∣=r2−1
⇒2(r−1)2=r2−1
⇒r2−4r+3=0
⇒r1=1,r2=3
Hence, r12+r22−r1r2=1+9−3=7