Sure, Brits are known to keep calm, carry on, and all that. But no one’s saying that’s going to be easy this week. The UK budget drops on Wednesday and the big question is just how painful the tax hikes will be.

Higher taxes are coming. The British government needs to raise £30 billion ($39 billion) to plug a hole in its finances. The issue is, the more the taxman takes, the less folks have in their wallets – and that means less money flowing into the economy. The stock market’s wise to that, so already, domestically focused and growth-sensitive shares have been underperforming.

UK stock valuations are the cheapest among developed markets, but for a reason: earnings growth’s been ho-hum, and the economic outlook, dire. A growth agenda in the budget – with things like tax incentives to encourage investment and boost productivity – could puff those valuations up a bit, but no one’s holding their breath.

Foreign exchange, or FX, traders are gearing up for fireworks, though. One-week options on the UK pound have already jumped to multi-month highs. But the real drama could come from the bond market. The reaction of British government bonds, or “gilts”, will tell you whether the market approves of the government’s budget and outlook. If there’s a selloff, the answer is no. And that could damage investor confidence all over again.

The UK’s not the only country dealing with budget drama. The Japanese yen just slumped under the weight of a new $135 billion support package, aimed at boosting consumer spending. And the country’s long-term bond yields just hit highs not seen in 30 years. And that’s something to keep an eye on. After all, higher Japanese bond yields have a habit of knocking global asset prices around.